Carillon Tower Advisers, an investment management company, released its fourth-quarter 2025 investor letter for the “Carillon Scout Mid Cap Fund”. A copy of the letter can be downloaded here. Major U.S. equity indices delivered positive returns in the fourth quarter, while the Russell Midcap® Index return lagged with nominal positive gains. Strong corporate earnings revisions and lower short-term interest rates supported U.S. market returns. Investors’ focus on an optimistic 2026, and consensus outperformed the market amid long-term government shutdowns. High sector return dispersion was observed in the Russell Midcap Index, with healthcare, materials, and IT leading. However, investors’ bias towards higher beta and more cyclical stocks led Communication services, real estate, and utilities to lag in the quarter.  The fund expects the Midcap equities to trade higher in 2026, supported by broader market involvement, though this view aligns with consensus. U.S. market index earnings are projected to grow significantly in 2026 despite price-to-earnings ratios being higher than historical averages.  Please review the Fund’s top five holdings to gain insights into their key selections for 2025.

In its fourth-quarter 2025 investor letter, Carillon Scout Mid Cap Fund highlighted Ciena Corporation (NYSE:CIEN) as one of its leading contributors. Ciena Corporation (NYSE:CIEN) is a leading network technology company that provides hardware, software, and services for various network operators. On March 20, 2026, Ciena Corporation (NYSE:CIEN) stock closed at $383.89 per share. One-month return of Ciena Corporation (NYSE:CIEN) was 11.32%, and its shares gained 452.12% over the past 52 weeks. Ciena Corporation (NYSE:CIEN) has a market capitalization of $54.306 billion.

Carillon Scout Mid Cap Fund stated the following regarding Ciena Corporation (NYSE:CIEN) in its fourth quarter 2025 investor letter:

"Ciena Corporation (NYSE:CIEN) designs and manufactures advanced optical and packet-optical networking hardware, including transport systems and pluggable transceivers. The stock’s strong performance was driven primarily by the strength in cloud providers’ demand as Ciena’s high-speed optical networking solutions are critical components of high-performance computing capacity buildouts. Hyperscalers led the trend while emerging customer groups such as smaller AI-focused cloud data center operators grew rapidly. Additionally, a recovery in telecommunications network investment continues and is expected to extend into next year."

Ciena Corporation (NYSE:CIEN) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 71 hedge fund portfolios held Ciena Corporation (NYSE:CIEN) at the end of the fourth quarter, compared to 70 in the previous quarter. Ciena Corporation (NYSE:CIEN) delivered revenue of $1.43 billion in the first quarter of fiscal 2026, its highest ever and at the top end of the guidance, reflecting strong execution across the business. While we acknowledge the potential of Ciena Corporation (NYSE:CIEN) 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 Ciena Corporation (NYSE:CIEN) and shared Diamond Hill Mid Strategy's views on the company. In Q4 2025, Ciena Corporation (NYSE:CIEN) was a standout performer of Madison Small Cap Fund. 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.