Madison Mid Cap Fund: Realizing Gains in High-Speed Switch Leader Arista Networks (ANET)

Madison Investments , an investment advisor, released its second-quarter 2026 investor letter for the "Madison Mid Cap Fund". You can download a copy of the letter here . U.S. stock market indices posted their strongest second-quarter performance since 2020, driven largely by enthusiasm for Artificial Intelligence. Nine of the ten largest companies in the Russell Midcap Index benefit directly from the AI data-center boom; one rose 257%, while the others gained between 17% and 136%. A small group of AI-related stocks has powered most of the index's year-to-date returns, reversing the broader market participation seen earlier this year. Although AI will reshape society and the economy, today's apparent winners may not remain so, and current valuations may prove unsustainable. Other risks include unpredictable federal policy, partisan gridlock, expanding deficits, inflation, higher interest rates, stretched consumer finances, and geopolitical volatility. The Class Y of the Fund returned 8.58% in the quarter compared to Russell Midcap's 13.83% return. The firm believes its Mid Cap portfolio combines strong long-term growth prospects with resilience amid potential challenges. Please review the Fund's top five holdings to gain insights into its key selections for 2026.

In its second-quarter 2026 investor letter, Madison Mid Cap Fund highlighted Arista Networks, Inc. (NYSE: ANET ) as one of its leading performance contributors. Arista Networks, Inc. (NYSE:ANET) is a high-speed switching and cloud networking solutions provider for hyperscale users. On September 22, 2026, Arista Networks, Inc. (NYSE:ANET) closed at $205.19 per share. Over the past month, Arista Networks, Inc. (NYSE:ANET) returned 1.45%, but its shares are up 43.85% over the past year. Arista Networks, Inc. (NYSE:ANET) has a market capitalization of $258.791 billion, and its stock has traded within a 52-week range of $114.52 to $214.89.

Madison Mid Cap Fund stated the following regarding Arista Networks, Inc. (NYSE:ANET) in its Q2 2026 investor letter:

"The top five contributors for the quarter were MKS, Amphenol, Arista Networks, Inc. (NYSE:ANET), Bio Techne, and Waters. In a market highly focused on the stocks of AI beneficiaries, it's no surprise to see the three companies in the portfolio with the most AI infrastructure exposure lead the way this quarter. The AI data center build out is also driving high revenue and backlog growth for Arista Networks' (ANET) advanced networking gear. We sold shares in Arista Networks (ANET) on valuation. Arista is the leader in high speed network switches used in data centers. The surge in data center builds has boosted what was already a high growth profile, and share price performance has followed suit. We felt the bright outlook was now baked into the stock."

"The top five contributors for the quarter were MKS, Amphenol, Arista Networks, Inc. (NYSE:ANET), Bio Techne, and Waters. In a market highly focused on the stocks of AI beneficiaries, it's no surprise to see the three companies in the portfolio with the most AI infrastructure exposure lead the way this quarter. The AI data center build out is also driving high revenue and backlog growth for Arista Networks' (ANET) advanced networking gear.

We sold shares in Arista Networks (ANET) on valuation. Arista is the leader in high speed network switches used in data centers. The surge in data center builds has boosted what was already a high growth profile, and share price performance has followed suit. We felt the bright outlook was now baked into the stock."