Why Baird Sees Strong Growth Potential in Centuri Holdings, Inc. (CTRI)

Baird Equity Asset Management recently released its "Small/Mid Cap Growth Strategy" second-quarter 2026 investor letter. A copy of the letter can be downloaded here . The fund benefited from a sharp rebound in the broader equity market during the second quarter of 2026, as improving corporate earnings, resilient economic growth, moderating inflation, and continued artificial intelligence investment supported strong gains across growth stocks. The strategy returned 17.7% net of fees in Q2, compared with a 24.0% gain for the Russell 2500 Growth Index, with the more than 600-basis-point relative shortfall primarily driven by factor exposures, as high-volatility, high-beta, and high-momentum stocks significantly outperformed; despite positive stock selection, the strategy could not keep pace with the AI-led rally. Technology gained 41%, and industrials rose 16% in absolute terms, but both remained relative detractors as semiconductor and AI-infrastructure-related stocks surged, while consumer discretionary and consumer staples were positive relative contributors, and healthcare underperformed. Looking ahead, Baird believes AI has the potential to create substantial long-term value across industries, although rapidly rising expectations and increasingly concentrated market leadership indicate that risks are building in certain areas. Moreover, management is encouraged by broader market participation beyond semiconductors and data-center infrastructure and continues to focus on high-quality businesses with durable competitive advantages, attractive long-term growth opportunities, and management teams capable of creating value through changing market environments. In addition, please check the Fund's top five holdings to know its best picks in 2026.

In its second-quarter 2026 investor letter, Baird Small/Mid Cap Growth Strategy highlighted stocks like Centuri Holdings, Inc. (NYSE: CTRI ). Centuri Holdings, Inc. is an infrastructure services company that Baird believes has significant growth potential supported by its record backlog. The one-month return of Centuri Holdings, Inc. (NYSE:CTRI) was 1.80% while its shares traded between $19.03 and $42.99 over the last 52 weeks. On October 2, 2026, Centuri Holdings, Inc. (NYSE:CTRI) stock closed at approximately $20.54 per share, with a market capitalization of about $2.11 billion.

Baird Small/Mid Cap Growth Strategy stated the following regarding Centuri Holdings, Inc. (NYSE:CTRI) in its Q2 2026 investor letter:

"Given those sales, we added new ideas that would allow us to maintain exposure to AI-related industrials, such as Centuri Holdings, Inc. (NYSE:CTRI). For Centuri, we believe the market is underestimating the company's growth potential, as its record backlog points to earnings growth well above current expectations. Following its recent spin-off from Southwest Gas, the company remains underfollowed and misunderstood, while management is simultaneously improving business quality through initiatives such as equipment sale-leasebacks that should enhance returns, free cash flow, and capital efficiency over time ( Click Here To Read The Letter In Detail )."