FEIM Stock: A Record Backlog and an Ugly Quarter — Buy the Dip?

TSM Stock: It Makes 90% of the World’s AI Chips — And It’s Cheap

Taiwan Semiconductor (TSM) Q2 2026 — Taiwan Semiconductor (TSM), the world's dominant chip foundry (~90% of leading-edge manufacturing), reported a big Q2 2026 beat: ADR EPS of $4.31 (vs $3.82 est), with gross margin expanding to 67.7% and a 60.3% operating margin, driven by AI/high-performance-computing demand. The ADR (~$410, ~15% off its $479 high but nearly doubled off its $224 low) dipped ~2% on profit-taking. It trades ~25x forward for 25%+ growth; the Street target is ~$576 (+40%). The key risk is geopolitical (Taiwan). Taiwan Semiconductor is arguably the single most important company for the AI age: it physically manufactures nearly every advanced chip — Nvidia's GPUs, Apple's iPhone processors, AMD's — on machines it buys from ASML, with roughly 90% of the world's leading-edge production and essentially no competition. Q2 2026 was a big beat (ADR EPS $4.31 vs $3.82), with gross margin expanding to ~68% and a 60% operating margin — software-like economics for a manufacturer, powered by the AI/HPC supercycle. Its newest nodes (3nm, 2nm ramping) are sold out, giving it real pricing power. So why does the best business in tech trade at only ~25x? One reason: Taiwan. The geopolitical tail risk — a conflict or blockade — is severe and un-hedgeable, and it's the permanent discount on the stock. But at ~25x for 25%+ growth, a lot of that risk is priced in. Our owner-earnings work lands fair value near $500 (vs ~$410), below the Street's ~$576. Our call: BUY, 3/5 — the indispensable AI chipmaker at a discount to its growth. Own it, use Taiwan-headline dips to add, and size for the one risk you can't diversify away. Not financial advice. THE CALL: BUY (3/5, THE INDISPENSABLE AI CHIPMAKER — CHEAP, MIND THE TAIWAN RISK) — base-case value ~$500 vs ~$410 today. What to watch: AI and data-center capex holding up (keeping the sold-out, high-margin order book compounding); use Taiwan-tension selloffs as entry points; the risk to respect is any real geopolitical escalation over Taiwan — low-probability but high-severity Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.

NFLX Stock: The Streaming King Fell 42% — Time to Buy Netflix?

Netflix (NFLX) Q2 2026 — Netflix (NFLX) reported Q2 2026 revenue of $12.56B, up 13.4% YoY (roughly in line), with EPS of $0.80 (a penny beat) and a 33.4% operating margin. But the stock fell ~8% after hours on soft Q3 guidance (revenue +11.7% to $12.86B, below ~$13B hoped). It maintained FY2026 guidance (revenue $51.0-51.4B, 31.5% operating margin). Split-adjusted, the shares (~$74) sit near their 52-week low, down ~42% from the high (~20% YTD) — cheap by Netflix's own history at ~20x forward, with ad revenue on track to roughly double to ~$3B. Netflix spent years as the market's untouchable darling — and it's now down about 42% from its high, split-adjusted near $74, punished again and again on guidance. Q2 2026 was in line (revenue +13.4% to $12.6B, EPS $0.80, ~33% operating margin), but soft Q3 guidance (+11.7% vs ~$13B hoped) sent it down ~8% after hours. The core fear is deceleration: viewing hours rose just 2%, and Netflix is scaling back viewership disclosure. But this is still the best, most profitable streamer in the world, now trading around 20x forward — cheap by its own 30-40x history — with real levers left: advertising (revenue ~doubling to ~$3B this year, still early), continued price increases, and live/sports/gaming. It's a cash machine now, buying back stock at a 42%-off price. Our owner-earnings work lands fair value near $90 (vs $74), below the Street's ~$106 (65 of 99 analysts rate it Buy). Our call: BUY, 3/5 — a fallen king at a rare discount, if you can stomach a bumpy, show-me growth story. Watch engagement and the ad ramp above all. Not financial advice. THE CALL: BUY (3/5, THE FALLEN STREAMING KING — CHEAP, IF YOU CAN STOMACH SLOWING GROWTH) — base-case value ~$90 vs ~$74 today. What to watch: the advertising business inflecting faster than expected, or a quarter that simply beats the lowered bar (either would break the negative narrative and re-rate the multiple); the risk to watch is engagement — viewing hours up just 2%, and if they turn negative, pricing power erodes Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.

JBHT Stock: J.B. Hunt Doubled on the Freight Turn — Too Late to Buy?

J.B. Hunt Transport (JBHT) Q2 2026 — J.B. Hunt Transport (JBHT), the freight and logistics bellwether, reported Q2 2026 adjusted EPS of $1.91, beating $1.71, with EPS inflecting up from $1.49 the prior quarter and operating margins improving — early signs the multi-year freight recession is turning. The stock popped ~8% to a fresh 52-week high (~$298), having more than doubled off its ~$130 low. But it now trades at ~46x trough / ~30x normalized earnings, right at the Street's ~$298 average target — the recovery is largely priced in. J.B. Hunt is a bellwether for the whole American economy — a freight and logistics giant (intermodal, dedicated fleets, brokerage, final mile) whose stock has just more than doubled off its low, betting a brutal multi-year freight recession is finally ending. Q2 2026 gave real evidence: adjusted EPS of $1.91 beat, and — the key point — earnings inflected from $1.49 to $1.91 quarter-over-quarter as volumes and pricing firmed. With huge operating leverage in intermodal, profits can climb fast off a trough. The catch is the price: the stock sits at a 52-week high after a ~130% run, trades near 46x trough / 30x normalized earnings, and Wall Street's average target (~$298) is right where it trades — analysts see almost no upside left. The easy money, buying the scary trough, has been made. Our cycle-adjusted fair value lands near $285, just below the ~$298 price. Our call: HOLD, 3/5 — a great operator riding a real recovery that's already in the price. Own it through the cycle if you like; we'd wait for a pullback toward the low $250s. Watch the freight-rate data. Not financial advice. THE CALL: HOLD (3/5, THE FREIGHT CYCLE IS TURNING — BUT IT'S ALREADY IN THE PRICE) — base-case value ~$285 vs ~$298 today. What to watch: a pullback toward the low $250s (a far better entry for the same recovery thesis) as the ideal add; on the upside, freight rates accelerating faster than the consensus would push earnings past mid-cycle — the risk is the recovery stalling at a 52-week high Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.

UAL Stock: United Raised Guidance Through a $6B Fuel Hit — Buy It?

United Airlines (UAL) Q2 2026 — United Airlines (UAL) reported a strong Q2 2026: revenue up 16% YoY to $17.7B, adjusted EPS $1.99 (beat $1.91), unit revenue (TRASM) +12.1%, with premium revenue +16%, loyalty +11% and cargo +23%. Most notably, it RAISED full-year 2026 adjusted EPS guidance to $9.00-$11.00 despite absorbing nearly $6B more fuel cost. The stock (~$119, ~14% off its $139 high, ~12x forward) barely moved. The Street is bullish — a Buy consensus, target ~$155 (+30%). Airlines have destroyed shareholder value for decades — brutally cyclical, capital-hungry, at the mercy of fuel and labor. So is United, the best-run of the group, the exception? Its Q2 2026 was genuinely strong: revenue +16% to $17.7B, adjusted EPS $1.99 (beat), unit revenue +12%, and — the key point — it RAISED full-year guidance to $9-11 adjusted EPS while absorbing a nearly $6B fuel-cost increase. That's pricing power beating input costs. The engine is its premium strategy: premium-cabin revenue +16%, MileagePlus loyalty +11% (the closest thing to an airline moat), and a hard-to-replicate international network. The industry has consolidated to four disciplined carriers, and travelers are trading up to premium — right where United is strongest. At ~12x it's cheap, but we discount airline earnings for cyclicality: our cycle-adjusted fair value lands near $140 (vs $119), below the Street's $155. Our call: BUY, 3/5 — a cheap, well-run airline in a better-structured industry. Own it as a value bet; buy weakness, and watch the demand data, because in airlines the cycle is everything. Not financial advice. THE CALL: BUY (3/5, CHEAP AND EXECUTING — RAISED GUIDANCE THROUGH A FUEL SHOCK) — base-case value ~$140 vs ~$119 today. What to watch: unit revenue and premium demand holding up (pricing power intact); the risk that breaks it is any sign travel demand is rolling over or a fuel spike it can't pass through — buy weakness rather than chase strength Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.

CTAS Stock: Cintas Popped 7% on Earnings — But It’s ~40x. Buy It?

Cintas (CTAS) Q4 FY2026 — Cintas (CTAS), the uniform-rental and facility-services compounder, reported fiscal Q4 2026: revenue up ~7% to $2.9B, adjusted EPS $1.29 (beat $1.24), operating margin over 23%. The stock popped ~7%. It's a wide-moat, recurring-revenue machine (route density, ~23% margins, cross-selling first aid/safety and fire protection) — one of the best-performing stocks of the past few decades. But near ~$206 (~9% off its $227 high) it trades at ~40x earnings for ~8-10% growth. The Street is split — a Hold consensus, target ~$231. Cintas is one of the most boring businesses in the market — renting uniforms and supplying mats, first-aid kits and fire extinguishers — and one of the best-performing stocks of the last few decades. It just beat again (fiscal Q4 revenue +7% to $2.9B, adjusted EPS $1.29, ~23% operating margin) and popped ~7%. The moat is route density: once its trucks serve a neighborhood, the next customer is nearly free, driving best-in-class margins and relentless, recurring-revenue compounding via new customers, cross-selling, and price. There's no turnaround to debate — the only question is the price. At ~40x earnings for ~8-10% growth, it's priced for perfection: our owner-earnings work lands fair value near $203, essentially right at the ~$206 price, with no margin of safety. Our call: HOLD, 3/5 — an elite compounder we'd love to own cheaper. Own it if you have it; wait for a market pullback toward the mid-$170s if you don't. Not financial advice. THE CALL: HOLD (3/5, AN ELITE COMPOUNDER, PRICED FOR PERFECTION) — base-case value ~$205 vs ~$206 today. What to watch: a broad market pullback that takes it toward the mid-$170s (a rare cheap entry), or growth reaccelerating above 10% (via cross-selling or M&A) that lets the ~40x multiple grow into itself; the risk is a de-rating from that multiple on any growth wobble Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.