Core Insights - TE Connectivity plc has appointed Dr. Ken Washington to its board of directors, effective November 17, 2025, bringing significant technology development experience to the company [1][2]. Company Overview - TE Connectivity plc is a global leader in industrial technology, focusing on connectivity and sensor solutions that support advancements in transportation, energy networks, automated factories, and data centers [4]. Leadership Experience - Dr. Washington has a robust background in technology and innovation, having served as senior vice president and chief technology & innovation officer at Medtronic plc since 2023, and previously held key positions at Amazon Lab126 and Ford Motor Company [3]. Recent Performance - TE Connectivity reported a 17% sales growth in its fiscal fourth quarter, exceeding guidance, indicating strong financial performance [5]. Upcoming Events - The company will host an Investor Day on November 20, 2025, in Philadelphia, which will provide further insights into its strategic direction and performance [6].

Financial Performance - Fiscal 2025 net sales increased by 8.9% to $17,262 million compared to fiscal 2024, driven by a 23.7% increase in the Industrial Solutions segment[175] - Organic net sales growth for fiscal 2025 was 6.4%, with Richards Manufacturing contributing $179 million in net sales since its acquisition in April 2025[175] - Transportation Solutions segment net sales decreased by 1.0% to $9,388 million, primarily due to declines in sensors and commercial transportation markets[185] - Industrial Solutions segment net sales rose to $7,874 million, reflecting strong growth in digital data networks and energy markets[185] - Operating income for fiscal 2025 was $3,211 million, an increase of $415 million from fiscal 2024, resulting in an operating margin of 18.6%[196] - Operating income in the Transportation Solutions segment decreased by $62 million to $1,818 million in fiscal 2025, with an operating margin of 19.4%[205] - Organic net sales in the Automotive sector were flat in fiscal 2025, with growth of 11.3% in the Asia-Pacific region offset by declines in the EMEA and Americas regions[207] - Industrial Solutions segment net sales increased by $1,510 million, or 23.7%, in fiscal 2025 compared to fiscal 2024, driven by organic net sales growth of 17.6% and a 5.7% contribution from acquisitions[208] - Digital data networks saw organic net sales growth of 72.6% in fiscal 2025, primarily due to growth in AI and cloud applications[209] - The company reported a net loss of $197 million for fiscal 2025, an improvement from a net loss of $271 million in fiscal 2024[238] Expenses and Margins - Gross margin improved to 35.2% in fiscal 2025, up from 34.4% in fiscal 2024, with a gross margin increase of $623 million attributed to higher volume and improved productivity[188] - In fiscal 2025, selling, general, and administrative expenses increased by $134 million to $1,866 million, representing 10.8% of net sales[190] - Cost of sales for fiscal 2025 was $11,183 million, representing 64.8% of net sales, compared to 65.6% in fiscal 2024[188] - Acquisition and integration costs in fiscal 2025 totaled $47 million, with $28 million related to the acquisition of Richards Manufacturing[192] - Net restructuring charges were $126 million in fiscal 2025, down from $166 million in fiscal 2024, with expected annualized cost savings of approximately $80 million by the end of fiscal 2026[194] Cash Flow and Dividends - Cash provided by operating activities increased by $662 million to $4,139 million in fiscal 2025, attributed to higher pre-tax income and reduced income tax payments[219] - Cash dividends paid to shareholders were $2.72 per ordinary share in fiscal 2025, with a quarterly dividend of $0.71 declared for December 2025[175] - The board of directors declared a quarterly cash dividend of $0.71 per ordinary share, payable on December 12, 2025[232] - During fiscal 2025, the company repurchased approximately 8 million ordinary shares for $1,356 million, with $1.4 billion remaining under the share repurchase authorization[234] Acquisitions and Investments - The company acquired Richards Manufacturing for approximately $2.3 billion, enhancing its Industrial Solutions segment[179] - The company acquired Richards Manufacturing for approximately $2.3 billion in fiscal 2025, along with two additional businesses for a combined cash purchase price of $321 million[222] - Capital expenditures were $936 million in fiscal 2025, with expectations for fiscal 2026 capital spending to be approximately 5% of net sales[221] Debt and Financial Position - Total debt at fiscal year end 2025 was $5,694 million, an increase from $4,203 million in 2024[224] - The company has approximately $3.5 billion of cash and cash equivalents that are considered permanently reinvested in global operations[218] - Total current assets increased to $1,236 million in fiscal 2025 from $1,164 million in fiscal 2024, while total noncurrent assets rose to $2,465 million from $2,377 million[237] - Total contractual cash obligations at fiscal year end 2025 amounted to $8,597 million, including long-term debt principal payments of $5,753 million[243] - As of fiscal year end 2025, the ratio of Consolidated Total Debt to Consolidated EBITDA was compliant with the covenant, remaining below the threshold of 3.75 to 1.0[229] Tax and Deferred Assets - Income tax expense for fiscal 2025 was $1,361 million, with an effective tax rate of 42.5%, compared to a benefit of $397 million and an effective tax rate of (14.2)% in fiscal 2024[197] - The valuation allowance for deferred tax assets increased to $8,821 million in fiscal 2025 from $8,285 million in fiscal 2024[199] - The company has significant valuation allowances for deferred tax assets, which may impact future income tax expenses and earnings[263] - Changes in tax laws and rates could affect recorded deferred tax assets and liabilities, but no material changes are currently anticipated[264] - The company recognizes tax liabilities based on estimates of uncertainties in tax regulations across multiple jurisdictions[265] Pension and Retirement Plans - The company expects pension contributions to be approximately $70 million in fiscal 2026[220] - A 25-basis-point decrease in discount rates would increase the present value of pension obligations by $63 million, while a 25-basis-point increase would decrease it by $60 million[268] - At fiscal year end 2025, the long-term target asset allocation in U.S. plans is 25% return-seeking assets and 75% liability-hedging assets, with a current allocation of 67% return-seeking and 33% liability-hedging[270] - The funded status of defined benefit pension plans is measured as the difference between the fair value of plan assets and the projected benefit obligation[266] Market Risks and Hedging - The company utilizes established risk management policies to manage market risks associated with interest rates and foreign currency movements[283] - A 10% appreciation or depreciation of the underlying currency in cross-currency swap contracts would change the unrealized value of contracts by $594 million at fiscal year end 2025[285] - At fiscal year end 2025, commodity hedges related to expected purchases of gold, silver, copper, and palladium were in a net gain position of $80 million with a notional value of $569 million[290]

Core Insights - The Zacks Electronics - Miscellaneous Components industry is experiencing growth due to automation and increased spending in sectors like semiconductors, automobiles, and healthcare, with companies like TE Connectivity, nVent Electric, and Fabrinet positioned to benefit from AI and IoT advancements [1][3][4] - However, the industry faces challenges from global macroeconomic conditions, end-market volatility, higher tariffs, and geopolitical tensions, particularly between the U.S. and China [1][5] Industry Overview - The industry includes companies that provide various electronic components and accessories, serving markets such as telecommunications, automotive electronics, medical devices, and consumer electronics [2] - Key customers are original equipment manufacturers, independent distributors, and electronic manufacturing service providers [2] Trends Impacting the Industry - Automation is a significant driver, with demand for faster and more efficient electronics leading to increased use of control systems and collaborative robots [3] - Miniaturization in semiconductor manufacturing is creating strong demand for advanced packaging and new manufacturing materials [4] - Geopolitical tensions, particularly the U.S.-China trade restrictions, are negatively impacting the industry, especially regarding semiconductor supply [5] Industry Performance - The Zacks Electronics - Miscellaneous Components industry ranks 62, placing it in the top 25% of over 250 Zacks industries, indicating bullish near-term prospects [6][7] - The industry's earnings estimates have increased by 9.4% since June 30, 2025, reflecting positive sentiment among analysts [8] Stock Market Performance - The industry has outperformed the S&P 500 and the broader Zacks Computer and Technology sector, appreciating 35.3% over the past year compared to the S&P 500's 14.2% and the sector's 24.9% [10] Current Valuation - The industry is currently trading at a forward P/E ratio of 23.45, slightly above the S&P 500's 23.30 but below the sector's 28.61 [13] Notable Companies - **TE Connectivity**: Expected to benefit from strong demand in AI and energy applications, with a projected 11% organic sales growth to $4.5 billion in Q1 fiscal 2026 [17][18] - **nVent Electric**: Anticipates 31-33% sales growth in Q4 2025, driven by acquisitions and strong data center orders [22][23] - **Fabrinet**: Forecasts 29% year-over-year revenue growth in Q2 fiscal 2026, with strong performance in non-optical communications [26][27]

Market Overview - The equity markets experienced significant volatility due to strong quarterly performances from some blue-chip tech firms being overshadowed by concerns over the rising valuations of AI companies [1] - Experts predict that the growth of AI firms may not justify the substantial investments, potentially leading to a market correction [1] - The U.S. government shutdown has reached a record 38 days, contributing to investor uncertainty and increased market volatility [1] Economic Conditions - The U.S. economy showed signs of weakness with 153,000 job cuts in October, the highest for that month in 22 years, raising concerns about labor market conditions [2] - Investors are adopting a cautious "wait-and-see" approach, focusing on "cash cow" stocks that provide higher returns [2] Investment Metrics - Return on Equity (ROE) is highlighted as a crucial metric for assessing a company's financial health and efficiency in generating profits [3][4] - A high ROE indicates effective reinvestment of cash at a high rate of return, distinguishing profitable companies from less efficient ones [3][4] Stock Screening Criteria - Stocks are screened based on parameters such as Cash Flow greater than $1 billion and ROE exceeding the industry average [5] - Additional criteria include Price/Cash Flow lower than the industry average and Return on Assets (ROA) greater than the industry average [6] - A 5-Year EPS Historical Growth greater than the industry average is also considered to ensure continued earnings momentum [6] High-ROE Stocks - TE Connectivity, ZTO Express, Corning, Banco Bilbao, and VICI Properties are identified as high-ROE stocks that offer resilient investment options [7] - TE Connectivity has a long-term earnings growth expectation of 10.7% and a trailing four-quarter earnings surprise of 6.5% on average, with a Zacks Rank of 2 [9] - ZTO Express has a long-term earnings growth expectation of 1.7% and also carries a Zacks Rank of 2 [11] - Corning has a long-term earnings growth expectation of 18.2% and a trailing four-quarter earnings surprise of 4.1% on average, with a Zacks Rank of 1 [12] - Banco Bilbao has a long-term earnings growth expectation of 12% and a trailing four-quarter earnings surprise of 5.7% on average, with a Zacks Rank of 2 [13] - VICI Properties has a long-term earnings growth expectation of 4.2% and a trailing four-quarter earnings surprise of 0.4% on average, with a Zacks Rank of 2 [15]

Core Insights - The article highlights the significant growth and investment in the AI sector, particularly in infrastructure development, with a focus on companies that are well-positioned for future growth in 2026 [2][3][4]. Group 1: AI Infrastructure Investment - Four of the "magnificent 7" stocks are set to invest $380 billion in 2025 for AI infrastructure, marking a 54% year-over-year increase in capital expenditure [3]. - The demand for data center capacity is surging due to the growth of cloud computing and AI, indicating a robust market for related technologies [2]. Group 2: Company Highlights Amphenol Corp. (APH) - APH specializes in AI and machine learning connectivity solutions, holding an estimated 33% market share in AI-powered data center interconnects [5][6]. - The company anticipates a revenue growth rate of 10.6% and an earnings growth rate of 17.5% for the next year, with earnings estimates improving by 11.5% in the last 30 days [9]. Western Digital Corp. (WDC) - WDC's cloud end market, which constitutes 89% of total revenue, grew by 31% in the last quarter, driven by demand for high-capacity HDDs [10]. - The company expects a revenue of $2.9 billion for the fiscal second quarter of 2026, reflecting a 20% increase due to strong data center demand [12]. - WDC has an expected revenue growth rate of -12.3% and an earnings growth rate of 49.7% for the current year, with earnings estimates improving by 10.6% recently [13]. Vertiv Holdings Co. (VRT) - VRT reported a 35% sales growth, benefiting from strong market demand and an extensive product portfolio for data centers [15]. - The partnership with NVIDIA is a key factor in VRT's strategy to provide scalable power solutions for AI data centers [16]. - The expected revenue growth rate for VRT is 20.3%, with earnings growth at 25.6% for the next year [17]. Corning Inc. (GLW) - Corning focuses on optical connectivity products, which are increasingly in demand due to the growth of AI applications and changing data consumption patterns [18][20]. - The expected revenue growth rate for Corning is 10.1%, with earnings growth at 19.8% for the next year [21]. TE Connectivity plc (TEL) - TEL is experiencing strong growth in its Industrial Solutions segment, driven by demand for AI applications and energy solutions [22]. - The expected revenue growth rate for TEL is 9.2%, with earnings growth at 16.6% for the current year [24].

Core Insights - TE Connectivity's visit to Yidong Electronics highlights the latter's growing importance in the AI computing supply chain [2] - The meeting focused on the surging demand for connectors and key components driven by the explosive growth of AI computing devices [2] - TE Connectivity anticipates continued high growth, particularly in the AI smart devices and data center connector sectors [2] Group 1: Company Developments - TE Connectivity has achieved significant growth in recent years, especially in the demand for high-speed connectors and related components for AI devices [2] - The company plans to expand its manufacturing capabilities not only in mainland China but also in overseas locations, with the Philippines set to become its largest production base outside of China [2] - TE Connectivity's DND division aims to enhance support for its suppliers' overseas factories, emphasizing collaboration with Yidong Electronics on new product development and capacity expansion [2]

Industry Overview - The artificial intelligence (AI) sector is experiencing significant growth, driven by the expansion of cloud computing and data centers, with a robust demand scenario supporting this momentum [1] - The demand for data center capacity has surged to manage and store the increasing volume of cloud computing-based data [1] Capital Expenditure Trends - Four of the "magnificent 7" stocks are set to invest $380 billion in 2025 for AI infrastructure development, marking a 54% year-over-year increase in capital spending on the AI ecosystem [2][7] - Companies involved in this investment are projecting double-digit growth in 2026, fueled by AI infrastructure and data center expansion [7] Company-Specific Insights Amphenol Corp. (APH) - Amphenol provides AI and machine learning-based connectivity solutions, holding an estimated 33% market share in AI-powered data center interconnects [4][5] - The company is expected to see revenue and earnings growth rates of 10.6% and 17.5%, respectively, for the next year, with an 11.5% improvement in earnings estimates over the last 30 days [9] Western Digital Corp. (WDC) - Western Digital's cloud end market, which constitutes 89% of total revenue, surged 31% in the last reported quarter, driven by high-capacity HDD demand [10] - The company anticipates a 20% revenue increase in fiscal second-quarter 2026, supported by strong data center demand and high-capacity drive adoption [12] - Expected revenue and earnings growth rates for the current year are -12.3% and 49.7%, respectively, with a 10.6% improvement in earnings estimates over the last week [13] Vertiv Holdings Co. (VRT) - Vertiv's sales grew by 35%, reflecting strong market demand and an extensive product portfolio that includes thermal systems and modular solutions [15] - The company has an expected revenue and earnings growth rate of 20.3% and 25.6%, respectively, for next year, with a 6.6% improvement in earnings estimates over the last 30 days [17] Corning Inc. (GLW) - Corning focuses on innovative optical connectivity products, with an expected revenue and earnings growth rate of 10.1% and 19.8%, respectively, for next year [21] - The demand for optical solutions is strong due to changing data consumption patterns and the need for faster data transfer [20] TE Connectivity plc (TEL) - TE Connectivity is benefiting from strong demand in its Industrial Solutions segment, particularly in AI applications [22] - The company has an expected revenue and earnings growth rate of 9.2% and 16.6%, respectively, for the current year, with a 7.4% improvement in earnings estimates over the last week [24]

Core Insights - The London Company reported a 6.3% return for its Large Cap Strategy in Q3 2025, underperforming the Russell 1000 Index which gained 8.0% [1] - The rally in US equities was attributed to the Fed rate cut, strong corporate earnings, and enthusiasm around AI [1] - TE Connectivity Ltd. (NYSE:TEL) was highlighted as a top performer, benefiting from AI spending and maintaining strong margins despite mixed demand [3] Company Performance - TE Connectivity Ltd. achieved a one-month return of 11.17% and a 52-week gain of 65.53%, closing at $246.87 per share with a market cap of $72.718 billion on November 3, 2025 [2] - The company is recognized for its diversified portfolio, high-value products, and market leadership, which position it for sustained growth and margin expansion [3] Investment Sentiment - TE Connectivity plc was held by 47 hedge fund portfolios at the end of Q2 2025, an increase from 45 in the previous quarter [4] - Despite its potential, some analysts believe other AI stocks may offer greater upside potential and less downside risk compared to TE Connectivity [4]

Core Viewpoint - The demand for AI-related equipment is driving significant growth for Tokyo Electron Limited (TEL), leading to an upward revision of its financial forecasts for the fiscal year 2025, surpassing market expectations [2][3]. Financial Performance - TEL revised its consolidated revenue target for the fiscal year 2025 from 2.35 trillion yen to 2.38 trillion yen, reflecting a year-on-year decrease of 2.1% [2]. - The consolidated operating profit target was adjusted from 570 billion yen to 586 billion yen, representing a year-on-year decline of 16.0% [2]. - The consolidated net profit target was increased from 444 billion yen to 488 billion yen, indicating a year-on-year decrease of 10.3% [2]. - For the last quarter (July-September 2025), TEL reported a consolidated revenue growth of 11.2% year-on-year to 630 billion yen, with operating profit increasing by 6.9% to 158.4 billion yen, and net profit rising by 5.2% to 123.8 billion yen [3]. Market Trends - The global market size for wafer fab equipment is maintained at the previous estimate of 115 billion USD, driven by investments in advanced logic chips and DRAM for AI applications, with a recovery trend in NAND Flash [3]. - The strong demand for AI server equipment is expected to continue driving investments in advanced semiconductors [3]. Regional Sales Performance - TEL's revenue in the Japanese market slightly increased by 0.6% year-on-year to 52.9 billion yen, accounting for 8.4% of total revenue [4]. - Revenue in North America plummeted by 52% to 38.4 billion yen, representing 6.1% of total revenue [4]. - European revenue decreased by 55% to 10.8 billion yen, making up 1.7% of total revenue [4]. - South Korean revenue surged by 67% to 132.5 billion yen, contributing 21.1% to total revenue [4]. - Taiwanese revenue increased by 59% to 119.7 billion yen, accounting for 19.0% of total revenue [4]. - Revenue from China grew by 9% to 254.1 billion yen, representing 40.3% of total revenue [4]. - Revenue from Southeast Asia and other markets slightly increased by 0.5% to 21.3 billion yen, making up 3.4% of total revenue [4].

Core Insights - China is not only the largest display market globally but also at the forefront of technological innovation [1][3] - TEL's global sales are highest in China, and the company aims to deepen cooperation with Chinese enterprises in the display industry [3] Industry Overview - The 2025 World Display Industry Innovation Development Conference was held in Chengdu, highlighting the rapid rise of the new display industry in the region [1][3] - The global display industry continues to show strong growth resilience despite macro challenges, driven by technological innovation and industrial cluster upgrades in China [3] Company Strategy - TEL focuses on dry etching processes, providing solutions for both LCD and OLED applications, and has established partnerships with multiple Chinese display companies [3] - The company plans to enhance equipment quality and cost-effectiveness while concentrating on high-growth areas like OLED, aiming for long-term industry development through localized services [3]