Market Overview - Diamond Hill Capital reported a rebound in markets after a downturn in early April, with the Russell 3000 Index showing an approximate increase of 11% [1] - Large-cap stocks experienced the highest growth, rising just over 11%, while small-cap and mid-cap stocks gained around 8.5% each [1] - The Select Strategy portfolio returned 7.31% (net) for the quarter, underperforming compared to the Russell 3000 Index's return of 10.99% [1] Company Focus: Coherent Corp. (NYSE:COHR) - Coherent Corp. is highlighted as a significant contributor to the portfolio, benefiting from increased demand for optical transceivers in data centers [3] - The stock of Coherent Corp. saw a one-month return of 22.97% and a 52-week gain of 21.59%, closing at $107.97 per share with a market capitalization of $16.822 billion on September 29, 2025 [2] - Coherent Corp. was held by 66 hedge fund portfolios at the end of Q2 2025, an increase from 61 in the previous quarter [3] Investment Insights - While Coherent Corp. is recognized for its potential, the company suggests that certain AI stocks may offer greater upside potential with less downside risk [3] - The investor letter indicates a focus on undervalued AI stocks that could benefit from Trump-era tariffs and the trend of onshoring [3]