Here's Why Amphenol Stock Popped Today (Hint: It's Artificial Intelligence Related))
Key Points
The company is seen as a hidden play on artificial intelligence (AI) spending.
Management is aggressively pursuing expansion into the fast-growing market.
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Amphenol (NYSE: APH) stock rose by more than 6% as of 12 p.m. this morning after analysts at two financial heavyweights, Goldman Sachs and BofA, raised their price targets (to $183 and $165, respectively) while maintaining their buy ratings.
Amphenol stock in 2026
The electrical, electronic, and fiber-optic connector business has gone from being just another mature industrial cycle company to a picks-and-shovels play on artificial intelligence (AI) spending.
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It's not just a transformation in investors' thinking; the company is actively pursuing more exposure to the market. For example, the recent acquisition of Commscope's (NASDAQ: COMM) Connectivity and Cable Solutions (CCS) business gives Amphenol "adds significant fiber optic interconnect capabilities for the IT datacom and communications networks markets," according to Amphenol CEO Adam Norwitt in the press release. It's also set to add $4.1 billion in sales in 2026, compared to the $22.9 billion in sales the market expects for Amphenol overall in 2025.
Image source: Getty Images.
Is Amphenol stock a buy in 2026?
Management estimates the recent acquisition will add $0.15 to earnings per share (EPS) in 2026, and Wall Street is now expecting $4.42 in 2026, putting Amphenol on 35 times forward earnings expectations. That valuation appears rich, and the company is likely going to need to demonstrate improving momentum in AI-related sales (which analysts believe could happen) and/or a pickup in its industrial end markets to justify it or increase earnings estimates.
The good news is that both look likely, given ongoing strength in AI spending and the potential for the industrial sector to bounce from a slump over the last couple of years.
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Lee Samaha has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amphenol. The Motley Fool has a disclosure policy.
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