The alpha Brief: Insights on Quant Investing and the alpha Brief Portfolio (aBP)

Second-quarter adjusted EPS rose 30% year over year to $1.16, beating the $1.01 consensus, while $2.997 Bn of revenue was roughly flat and modestly above the $2.98 Bn estimate

I maintain a Buy rating on MCHP since the operating recovery is stronger, but approximately $5.1Bn of net debt, preferred-stock obligations and dilution keep this from being a risk-free rerating story.

The AI-optics thesis strengthened: both Components and Systems grew more than 100% year over year, initial 1.6T shipments began, and fiscal Q1 guidance moved to $1.225-$1.275 Bn of revenue.

I downgrade Micron Technology (NASDAQ: MU) from Strong Buy to Buy. The business is stronger, but the stock at $1,086.40 intraday on October 1 already sits 20.1% above the previous article's $904.28 purchase price, reducing the margin of safety.

I maintain my Buy rating on PG&E Corporation (PCG), but this is a risk-aware Buy. The valuation offers a margin of safety, while wildfire liability, leverage and the capital-plan reset remain material risks.

Q2 revenue rose 24% to $3.27 Bn, adjusted operating margin expanded 410 basis points to 22.6%, and adjusted EPS increased 60% to $1.52.

I maintain a Buy rating on Fabrinet. 4Q FY 2026 revenue reached $1.316Bn, up 45% year over year and $40Mn above consensus, while non-GAAP EPS of $4.10 beat by $0.29.

I am maintaining a BUY rating on Movado, but conviction is lower. At roughly 16.7x [my FY2027 EPS estimate], the shares no longer qualify as deeply discounted.Q2 FY2027 net sales rose 4.9% to $169.8Mn and adjusted EPS reached $0.54. Excluding the $0.11 duty-refund benefit, adjusted EPS was still about $0.43, up sharply from $0.23 a year earlier.

I rate the the AI infrastructure a Buy. The thesis is no longer limited to bitcoin production: 241 MW of contracted critical IT capacity now provides a credible path toward recurring, high-margin data center income.

I downgrade Coherent from Strong Buy to Buy. The business case is stronger, but 15.5% expected upside and poor cash conversion no longer justify the top rating.

I am downgrading Dana's rating from a STRONG BUY to a BUY. For Q2 Dana delivered sales of $2.01Bn, adjusted EBITDA of $207Mn and a 10.3% adjusted EBITDA margin. Revenue rose 4% and the margin expanded 270 basis points y/y.

I am downgrading SSRM from a STRONG BUY to BUY. The balance sheet and capital returns strengthened. But the operating margin of safety weakened because costs and second-half execution now carry more weight.

I am maintaining a buy on VICR's since it's 2Q FY2026 revenue of $143.4Mn beat the $138.4Mn consensus by 3.6%, while gross margin rose to 58.0% and diluted EPS of $1.04 beat consensus by 59.5%.

I am maintaining a Buy rating because recent results confirm that demand recovery, margin expansion, and cash-flow improvement are occurring faster than initially expected.

I rate Tesla, Inc. (NASDAQ: TSLA) a Buy because I believe the company is transitioning from an electric vehicle manufacturer into a diversified technology platform spanning autonomous driving, artificial intelligence, robotics, energy storage, and advanced manufacturing. While these investments continue to pressure near-term margins, they position Tesla to capture multiple long-term growth opportunities that extend well beyond vehicle sales.

I rate Brinker International, Inc. (NYSE: EAT) a Buy because I believe the company has successfully transformed Chili's into one of the strongest performers in the casual dining industry. Consistent improvements in food quality, service, restaurant operations, and everyday value have driven sustained market share gains, while disciplined capital allocation continues supporting earnings growth and shareholder returns.

Meta is a STRONG BUY. AI-native products plus recovering ad demand and rapid Reels monetization should lift EPS materially; current multiples underprice that upside while a massive balance sheet cushions risk.

DXP Enterprises is a specialty distributor retooling its mix toward higher-margin services and AI-enabled inventory solutions. I see durable free cash flow upside and a valuation gap versus peers that makes DXPE a BUY.

I am rating Merck a BUY because Merck's pipeline is not a future promise. It is actively delivering ahead of schedule, with the FDA approving KEYTRUDA plus Padcev for all muscle invasive bladder cancer patients on July 10, 2026, five weeks ahead of the original target date. And Lipfendra (enlicitide) on July 16 as the world's first oral PCSK9 inhibitor, while three additional FDA decisions remain on the calendar for September and October 2026.

Growth will be driven by the continued recovery in commercial aerospace, increasing demand for lightweight automotive materials, resilient packaging demand, and long-term sustainability trends that favor recyclable aluminum. Management also raised its full-year 2026 guidance following a strong first quarter.