Here are the Drivers Behind MACOM Technology Solutions Holdings, Inc.'s (MTSI) Surge in Q2

Artisan Partners, an investment management company, released its “Artisan Small Cap Fund” second-quarter 2025 investor letter. A copy of the letter can be downloaded here. Global markets saw an incredible but volatile quarter in the second quarter, shifting from deep declines to strong gains. In the quarter, its Investor Class fund ARTSX returned 7.30%, Advisor Class fund APDSX posted a return of 7.33%, and Institutional Class fund APHSX returned 7.36%, compared to a return of 11.97% for the Russell 2000 Growth Index. In addition, you can check the fund’s top 5 holdings to find out its best picks for 2025.

In its second-quarter 2025 investor letter, Artisan Small Cap Fund highlighted stocks such as MACOM Technology Solutions Holdings, Inc. (NASDAQ:MTSI). MACOM Technology Solutions Holdings, Inc. (NASDAQ:MTSI) manufactures analog semiconductor solutions for wireless and wireline applications. The one-month return of MACOM Technology Solutions Holdings, Inc. (NASDAQ:MTSI) was -10.23%, and its shares gained 15.50% of their value over the last 52 weeks. On August 21, 2025, MACOM Technology Solutions Holdings, Inc. (NASDAQ:MTSI) stock closed at $123.58 per share, with a market capitalization of $9.203 billion.

Artisan Small Cap Fund stated the following regarding MACOM Technology Solutions Holdings, Inc. (NASDAQ:MTSI) in its second quarter 2025 investor letter:

"Among our top Q2 contributors were Flex, MACOM Technology Solutions Holdings, Inc. (NASDAQ:MTSI) and iRhythm. MACOM designs and manufactures high-performance semiconductors. The company has been taking steps to accelerate top-line growth and expand margins by addressing smaller, long duration product cycle markets in which it can provide a differentiated offering, especially in compound semis (those made from two or more elements). Demand remains strong across MACOM’s key end markets, including US and European defense, data center and even telecom—spanning both long-haul and satellite segments. Moreover, MACOM’s above-average semiconductor production footprint within the US likely reduces its exposure to potential industrywide disruptions related to any potential tariff risks."

MACOM Technology Solutions Holdings, Inc. (NASDAQ:MTSI) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 34 hedge fund portfolios held MACOM Technology Solutions Holdings, Inc. (NASDAQ:MTSI) at the end of the second quarter, which was 36 in the previous quarter. In the second quarter of 2025, MACOM Technology Solutions Holdings, Inc. (NASDAQ:MTSI) reported record revenue of $235.9 million, representing an 8.1% sequential growth. While we acknowledge the potential of MACOM Technology Solutions Holdings, Inc. (NASDAQ:MTSI) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered MACOM Technology Solutions Holdings, Inc. (NASDAQ:MTSI) and shared the list of must-buy semiconductor stocks to invest in. In addition, please check out our hedge fund investor letters Q2 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.