Madison Investments, an investment advisor, released its fourth-quarter 2025 investor letter for “Madison Small Cap Fund”. A copy of the letter can be downloaded here. The fourth quarter was challenging for the fund and continued to underperform its benchmark, the Russell 2000 Index. The fund (Class I) returned -0.4%, lagging the benchmark’s 2.2% return. Sector allocation negatively impacted the Fund’s performance this quarter, with healthcare being the weakest sector. The Fund remains optimistic that the speculative market is losing momentum, but cautious, given the saying “markets can stay irrational longer than you can stay solvent”. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2025.
In its fourth-quarter 2025 investor letter, Madison Small Cap Fund highlighted stocks like Amplitude, Inc. (NASDAQ:AMPL). Amplitude, Inc. (NASDAQ:AMPL) is digital analytics platform based in San Francisco, California, that helps to analyze customer behavior across digital products. On March 12, 2026, Amplitude, Inc. (NASDAQ:AMPL) stock closed at $7.40 per share. One-month return of Amplitude, Inc. (NASDAQ:AMPL) was 16.72%, and its shares lost 37.02% over the past 52 weeks. Amplitude, Inc. (NASDAQ:AMPL) has a market capitalization of $989.58 million.
Madison Small Cap Fund stated the following regarding Amplitude, Inc. (NASDAQ:AMPL) in its fourth quarter 2025 investor letter:
“Amplitude, Inc. (NASDAQ:AMPL) has undergone a significant turnaround that has gone largely unnoticed since new CFO Andrew Casey joined the company to reboot the sales force and manage the company for profitable growth and free cash flow. Amplitude is a leader in digital analytics software that tracks, analyzes, and predicts user behavior across digital products (web and mobile). Its software helps product teams understand which features drive engagement, retention, and revenue. The economic quality is characterized by a highly recurring service revenue model, strong gross margins, and a recent inflection toward positive free cash flow. The company’s primary protective moats are the extremely high switching costs for customers. Migrating a deeply embedded analytics system involves re-tagging all events, retraining teams, and potentially losing historical data, making it costly and disruptive. The balance sheet is pristine with no debt and almost $270m in cash. The company went public during the 2021 software Initial Public Offering (IPO) frenzy at an extremely high valuation and has been largely forgotten over the last few years as it has undergone a turnaround. Andrew Casey’s resume is very impressive, with a background in tech giants Hewlett-Packard and ServiceNow. We believe the current valuation is extremely attractive and estimate the intrinsic value to be $21.”
Amplitude, Inc. (NASDAQ:AMPL) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 32 hedge fund portfolios held Amplitude, Inc. (NASDAQ:AMPL) at the end of the fourth quarter, up from 27 in the previous quarter. In Q4 2025, Amplitude, Inc. (NASDAQ:AMPL) reported revenue of $91.4 million, marking an increase of 17% year-over-year. While we acknowledge the risk and potential of Amplitude, Inc. (NASDAQ:AMPL) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than Amplitude, Inc. (NASDAQ:AMPL) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Amplitude, Inc. (NASDAQ:AMPL) and shared a list of best small cap tech stocks with high upside potential. In addition, please check out our hedge fund investor letters Q4 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.
