MD Sass, a boutique asset management firm, published its second-quarter investor update for its flagship, the “MD Sass Concentrated Value Strategy.” The letter can be downloaded here. In the first half of 2026, AI infrastructure stocks led the market, with the Russell 1000 Value increasing by 16.3%, outpacing the S&P 500 (10.2%) and Russell 1000 Growth (5.3%). This growth was fueled by semiconductor, memory, and hardware companies benefiting from AI development, even though they are considered cyclical. These sectors, representing only 7.7% of the Russell 1000 Value at the start of the year, contributed nearly 70% of its returns. The portfolio gained 10.0% in the second quarter, net of fees, compared to 13.9% for the Russell 1000 Value Index. Year-to-date, the strategy returned 6.6%, net of fees, versus 16.3% for the Index. The portfolio faced challenges due to limited exposure to companies with the greatest upside from AI infrastructure investments. It also lacked exposure to the Energy sector, which returned about 20% in the first half amid geopolitical tensions with Iran that increased commodity prices, affecting performance. The firm recognizes the importance of adapting its strategies while maintaining core investment principles as it explores future opportunities in emerging technological themes. Also, check the fund’s top five holdings to see its best picks in 2026.
In its second-quarter 2026 investor letter, MD Sass Concentrated Value Strategy highlighted Analog Devices, Inc. (NASDAQ:ADI). Analog Devices, Inc. (NASDAQ:ADI) is a US-based semiconductor company that engages in the design, manufacture, testing, and marketing of integrated circuits (ICs), software, and subsystem products and was added to the portfolio this quarter. On August 28, 2026, Analog Devices, Inc. (NASDAQ:ADI) closed at $361.78 per share. Over the past month, Analog Devices, Inc. (NASDAQ:ADI) returned -0.03%, while its shares have gained 43.96% in the last 52 weeks. Analog Devices, Inc. (NASDAQ:ADI) has a market capitalization of $175.31 billion, and its stock has traded within a 52-week range of $223.47 to $445.91.
MD Sass Concentrated Value Strategy stated the following regarding Analog Devices, Inc. (NASDAQ:ADI) in its Q2 2026 investor letter:
“Analog Devices, Inc. (NASDAQ:ADI) is one of the two largest analog semiconductor franchises globally. Analog semiconductors bridge physical and digital systems by sensing, converting, and managing signals and power. The business benefits from long product lives, sticky design wins, a broad customer base, modest capital intensity, and increasing content as systems become more complex and electrified.
Our thesis combines an improving cyclical backdrop with secular growth businesses approaching meaningful inflections. ADI has exposure to data centers, automated test equipment, aerospace and defense, industrial automation, and automobile electrification. While ADI is not a pure play AI company, we estimate that AI data center and semiconductor test related revenue represent approximately 20% of sales and could contribute 1,000 bps of revenue growth…” (Click here to read the full text)
