ZACKS·2025-11-26 18:01Core Insights - Amphenol (APH) and TE Connectivity (TEL) are leading global manufacturers of electrical connectors, sensors, and interconnect systems, serving critical markets such as automotive, industrial, aerospace, and communications [1][2] - Both companies are benefiting from long-term trends including vehicle electrification, data-center growth, and the demand for high-speed connectivity [2] Amphenol Overview - Amphenol reported record sales of $6.2 billion in Q3, a 53% increase year-over-year, with 41% organic growth and $6.1 billion in orders [3][4] - The company achieved a record operating margin of 27.5%, with adjusted EPS growing by 86% and free cash flow reaching $1.2 billion [3] - Amphenol's IT datacom business, now 37% of total sales, more than doubled due to strong AI-related demand [4] - Future opportunities include AI growth, defense spending, recovery in commercial aerospace, and electric vehicle transitions, with projected Q4 earnings between $0.89 and $0.91 per share [5][6] TE Connectivity Overview - TE Connectivity reported record Q4 revenues of $4.75 billion, a 17% year-over-year increase, with adjusted EPS rising 25% to $2.44 [7] - The company’s Industrial Solutions segment saw significant growth, with Digital Data Networks increasing by 80% and generating over $900 million in AI-related revenues [8] - TE Connectivity anticipates double-digit growth in Q1 of fiscal 2026, with sales up 17% and adjusted EPS up 23% [10] Comparative Performance - Year-to-date, Amphenol shares have increased by 98.4%, outperforming TE Connectivity's 55.5% increase [12] - Amphenol's shares are trading at a forward Price/Sales ratio of 6.67X, compared to TEL's 3.42X, reflecting its faster revenue and earnings growth [15] - The Zacks Consensus Estimate for Amphenol's 2025 earnings is $3.29 per share, indicating a 74.07% year-over-year increase, while TEL's estimate for fiscal 2026 is $10.56 per share, reflecting a 20.55% increase [18][20] Investment Outlook - Amphenol is positioned as the stronger stock due to its robust revenue and earnings growth, exceptional operating margins, and dominant position in AI-driven datacenter interconnects [21] - TE Connectivity, while steady, faces uneven end-market exposure, making Amphenol a more compelling buy in the current market [21]