Core Insights - The Madison Small Cap Fund experienced a challenging third quarter in 2025, with a decline of 1.3%, underperforming its benchmarks due to stock selection and a speculative market environment [1] Fund Performance - The small-cap index's performance was broad-based, indicating widespread challenges across the sector [1] - The fund's top five holdings were highlighted as key picks for 2025, although specific details were not provided in the summary [1] Ciena Corporation Analysis - Ciena Corporation (NYSE: CIEN) was noted as a significant investment, with a one-month return of -2.34% and a remarkable 154.00% increase over the past 52 weeks, closing at $178.26 per share with a market capitalization of $25.2 billion [2] - Ciena is positioned as a beneficiary of the capital spending boom in AI, although the fund's overall tech investments underperformed compared to the Russell 2000's tech stocks, which rose by 15% [3] AI Market Concerns - There is a prevailing fear among investors regarding the potential disruption of software business models by AI, leading to multiple compression across the software sector [3] - The company argues that fears of AI replacing critical software applications are exaggerated, citing that 60% of AI-generated answers are incorrect and that 95% of recent AI enterprise projects are failing, which undermines the notion of AI as a replacement for established systems [3]