# Amphenol (APH) — InvestMoat Analysis _Last analyzed: October 11, 2026_ _Asset class: equity · Canonical page: https://investmoat.com/stocks/aph_ ## Scores | Dimension | Score (0–100) | | --- | --- | | Moat durability | 71 | | Growth trajectory | 82 | | Valuation | 73 | | **Composite** | **77** | Scores are computed deterministically from this asset’s data by the InvestMoat formula (see https://investmoat.com/llms.txt for methodology). Scores are not directly comparable across asset classes. ## Key stats - **Ticker:** APH - **Market Cap:** ~$215B - **Price:** $87.24 ## Moat The world's second-largest connector maker by Bishop & Associates' 2024 count, Amphenol wins on custom design-in across thousands of customer platforms, run through more than 130 autonomous business units and a serial-acquisition machine; the moat is real but sits in physical parts, and a rising share of sales now rides AI data-center capex. ### The Interconnect Roll-Up Amphenol's durability is **design-in at scale plus an operating model rivals have not copied** — a supplier its customers specify rather than a monopoly: - **Designed In, Not Bought Off a Shelf:** Most of what Amphenol sells is engineered to a customer's platform — a GPU rack's copper backplane, a fighter jet's harness, a car's sensor — and qualified before production. Once a part is in, replacing it means re-qualifying the platform, so share is won at design time and held for the program's life. - **Decentralised and Acquisitive:** More than 130 general managers run their own P&Ls, and the company says it has acquired more than 50 businesses in the last ten years, including CommScope's Connectivity and Cable Solutions unit for about $10.6B in January 2026. The model lets it chase small niches fast and has lifted the adjusted operating margin to 29.8% in Q2 2026. - **Exposed to the AI Build:** IT datacom reached 43% of Q2 2026 sales, growing 63% organically, and Amphenol supplies high-speed copper cable and connectors into NVIDIA NVL72-class racks. TE Connectivity, Molex, Luxshare and Credo's active electrical cables all compete for the same rack content, and a hyperscaler capex pause would hit the fastest-growing line. **Moat verdict:** Amphenol is a net beneficiary of AI: the AI rack build is its fastest-growing market, and none of its moats rest on software an agent could replicate. The strongest pillar is design-in embedding across thousands of platforms, with intact design know-how, defense qualifications, scale, breadth and a hard-to-copy decentralised operating model behind it. The risk is cyclical, not structural — a hyperscaler capex pause or a shift from copper to optics inside the rack. ### Top competitors - **TE Connectivity (TEL):** The largest connector maker, competing across automotive, industrial, aerospace and data-center interconnect. - **Molex:** Koch-owned connector and cable maker competing for data-center and automotive design-ins. - **Luxshare Precision (002475.SZ):** Chinese interconnect and cable assembler competing for AI rack copper content. - **[Credo Technology (CRDO)](https://investmoat.com/stocks/crdo):** Active electrical cables competing with passive copper inside AI racks. ## Growth Amphenol grew FY2025 sales 52% to $23.1B (38% organic), with adjusted EPS up 77% and a record $4.4B of free cash flow (103% of net income). 2026 has accelerated: Q1 sales $7.6B (+58%, +33% organic, book-to-bill 1.24) and Q2 $8.8B (+55%, +30% organic, orders $10.7B, book-to-bill 1.23), with adjusted operating margin at 29.8%. IT datacom was 43% of Q2 sales and grew 63% organically; Harsh Environment Solutions grew 22% organically and Interconnect and Sensor Systems 13%. The CommScope CCS deal, closed in January for about $10.6B and expected to add about $4.1B of 2026 sales, accounts for much of the gap between reported and organic growth. Q3 is guided to $9.3–9.4B of sales (+50–52%) and $1.40–1.42 of pre-split adjusted EPS ($0.70–0.71 after the two-for-one split of September 2026). Q3 results are due October 28. - **Revenue CAGR estimate:** 13–18% - **Primary type:** both - **Margin trend:** expanding - **Key risk (moderate):** IT datacom is now 43% of sales and the main growth engine, so a 2027 hyperscaler capex digestion, or a shift from copper scale-up links to co-packaged optics inside the rack, would slow it just as CCS integration and new capacity land. Falsifiable: organic growth below 10% or a book-to-bill below 1.0 for two consecutive quarters in 2027, or adjusted operating margin back below 26%, would break the thesis. Secondary: net debt of $13.4B after the CCS deal limits room for the next large acquisition. - **Drivers:** - IT Datacom (AI racks, high-speed copper and fiber) — 43% of Q2 2026 sales, +89% YoY and +63% organic; Communications Solutions segment $5.4B at a 33.6% margin (accelerating) - Harsh Environment Solutions (defense, commercial air, industrial) — $1.86B in Q2 2026, +28% YoY and +22% organic; 30.1% segment margin (accelerating) - Interconnect and Sensor Systems (automotive, industrial, medical) — $1.5B in Q2 2026, +17% YoY and +13% organic; 21% segment margin (stable) - **Score derivation:** Base 80.3 (13–18% CAGR, midpoint 15.5%) + 2.7 trajectory (IT datacom and Harsh Environment accelerating; Interconnect and Sensor Systems stable) + 4 margin (expanding: adjusted operating margin 29.8% in Q2 2026 vs 25.6% a year earlier, about 29% excluding the $80M tariff recovery) − 5 moderate risk (AI data-center capex is the largest growth engine; moderate to match Corning and Eaton, since defense, industrial, auto and mobile sit outside that cycle, unlike Credo's high) = 82 ## Valuation At $87.24 (October 9 close, ~$215B market cap, post the two-for-one split), Amphenol sits between the $68 bear and $97 base, about two-thirds of the way from bear to base, for a valuation score of 73. That is roughly 33× a ~$2.66 2026 adjusted EPS and ~27× a ~$3.23 2027 consensus — a premium to Amphenol's own history, priced for the AI build to keep going. **Fair value:** ~$97 — All per-share figures are post-split. 2026 adjusted EPS is about $2.66 if Q4 lands near $0.75 after Q1 $0.53, Q2 $0.675 and a Q3 guide of $0.70–0.71; consensus 2027 is about $3.23 (pre-split $6.45). The $97 base prices ~30× 2027 EPS; the $68 bear is ~24× a ~$2.85 2027 if AI datacom digests. Q3 results on October 28 reset the base. Add on weakness toward the low $70s rather than at the current price. | Multiple | Value | Note | | --- | --- | --- | | P/E (2026E adjusted) | ~33× | ~$2.66 post-split 2026 adjusted EPS (Q1 $0.53 + Q2 $0.675 + Q3 guide ~$0.705 + Q4 ~$0.75) | | Forward P/E (2027E) | ~27× | ~$3.23 consensus 2027 EPS (pre-split $6.45 ÷ 2) | | PEG Ratio | ~1.7× | 2027 P/E ÷ 15.5% sales CAGR midpoint | | Price / FCF (2025) | ~49× | ~$215B ÷ $4.4B FY2025 free cash flow; 2026 FCF runs higher with CCS | At ~27× next year's earnings Amphenol trades at a premium to industrials and roughly in line with Corning, which is fair only if the AI build keeps compounding earnings above 20%. The fall from ~33× 2026 to ~27× 2027 signals a continuing earnings ramp, but the stock sits at an all-time high, so the margin of safety is thin. _(as of October 9, 2026)_ ## Price scenarios ### Bear — $68 Hyperscaler capex digests in 2027, IT datacom growth falls toward single digits, and the multiple reverts toward Amphenol's pre-AI range. - Organic growth falls below 10% and book-to-bill drops under 1.0 in 2027 - Adjusted operating margin slips back toward 26% as CCS and new capacity run under-utilised - 2027 EPS near $2.85 at ~24×, giving about $68 ### Base — $97 Amphenol delivers consensus 2027 earnings as AI datacom growth slows but stays strong and the other end markets compound. - IT datacom grows 20%-plus in 2027 as next-generation racks ramp - CCS integration lifts its margin toward the company average - 2027 EPS near $3.23 at ~30×, giving about $97 ### Bull — $130 AI scale-up networks stay copper-heavy longer than expected, Amphenol wins share in next-generation racks, and it is valued as AI infrastructure. - Copper scale-up links hold against co-packaged optics through the next rack generation - Book-to-bill stays above 1.15 through 2027 - 2027 EPS near $3.60 at ~36×, giving about $130 --- InvestMoat is a research and education framework. Nothing here is financial advice. Past performance does not guarantee future results.