Amphenol vs. TE Connectivity: Which Connector Stock is Most Suitable?

Amphenol APH and TE Connectivity TEL are two of the world’s largest manufacturers of electrical connectors, sensors and interconnect systems, serving vital markets such as automotive, industrial, aerospace and communications. Both companies have long histories of steady expansion and diversified revenue streams powered by mission-critical components.Both companies share a strong similarity as leading global manufacturers of connectors, sensors and interconnection systems. Both benefit from long-term trends such as vehicle electrification, data-center growth, and the need for robust, high-speed connectivity across industries.As demand for advanced connectors is accelerating, especially as AI infrastructure, EV platforms and automation expand. Investors are evaluating which companies offer strong growth, margin stability, and positioning for the next cycle. So, let's analyze which one is better to buy in the current situation?The Case for Amphenol StockAmphenol is one of the strongest players in the global interconnect and sensor market, supported by outstanding recent performance. In the third quarter, the company delivered record sales of $6.2 billion, up 53% year over year, with 41% organic growth and $6.1 billion in orders. Profitability was also exceptional, with a record 27.5% operating margin, 86% growth in adjusted EPS and free cash flow rising to $1.2 billion.The company benefits from wide exposure across IT datacom, automotive, industrial, aerospace and defense markets. Its IT datacom business, now 37% of total sales, more than doubled, driven by strong AI-related demand and next-generation data-center growth. Amphenol’s long-standing strength in high-speed and high-power interconnects makes it a key supplier for AI server systems. It is also expanding through acquisitions, including Rochester Sensors and Trexon, along with the pending addition of CommScope’s CCS business.Looking ahead, Amphenol anticipates significant opportunities from AI growth, defense spending, the recovery of commercial aerospace and the transition to electric vehicles. For the fourth quarter, the company projects earnings between 89 cents and 91 cents per share and revenue of $6.0 and $6.1 billion, indicating strong year-over-year growth. Full-year 2025 sales are expected to increase by about 50%, driven by robust design wins across next-generation platforms.Also, challenges remain, including higher tax rates, integration risks, geopolitical uncertainty and cyclical trends in mobile devices and communications networks. However, Amphenol’s low 0.7X net leverage and broad, diversified customer base help keep the company resilient.The Case for TEL StockTE Connectivity continues to benefit from strong secular growth trends across its core markets, including AI-driven data-center expansion, automotive electrification and industrial automation. The company delivered record fourth-quarter revenues of $4.75 billion, up 17% year over year and 11% organically, with adjusted EPS rising 25% to $2.44. Orders climbed to $4.7 billion, reflecting broad strength across both Transportation and Industrial segments. For fiscal 2025, TE achieved $17.3 billion in revenues, 20% adjusted operating margins and $3.2 billion in free cash flow.Momentum in its Industrial Solutions segment remains particularly strong. Digital Data Networks grew 80% in the quarter, supported by hyperscale AI demand and generating over $900 million in AI-related revenues, triple the prior year. Transportation results also held up well, fueled by content gains in data connectivity and electric powertrains in Asia.TEL sees opportunities from accelerating AI deployments, energy-grid modernization, factory automation, and steady improvement in aerospace and defense. Management expects double-digit growth in the first quarter of fiscal 2026, with sales up 17% and adjusted EPS up 23%, supported by strong design-win traction and healthy order levels.Acquisitions continue to be an important part of TE’s strategy. The company deployed $2.6 billion on bolt-on deals in fiscal 2025, including the Richards acquisition, which enhances its North American energy footprint. However, TE faces challenges such as uneven auto production, North American commercial-transportation softness and broader macro uncertainty.Price Performance and Valuation: APH vs. TELYear to date (YTD), Amphenol shares have jumped 98.4%, outperforming TE Connectivity’s appreciation of 55.5%, significantly higher than the Zacks Computer and Technology sector’s return of 25%. Investors may consider buying APH as its accelerating earnings growth, AI-driven demand, and strong fundamentals indicate the rally is supported by sustainable momentum, with meaningful room for further upside.YTD Price Performance: APH vs. TELImage Source: Zacks Investment ResearchValuation-wise, both APH and TEL shares are trading at a premium, as suggested by a Value Score of F and C, respectively. However, APH’s premium is supported by its faster revenue and earnings growth, greater exposure to high-growth AI and datacenter markets and its consistent track record of creating value through acquisitions.In terms of forward 12-month Price/Sales, APH shares are trading at 6.67X, higher than TEL’s 3.42X.APH vs. TEL ValuationImage Source: Zacks Investment ResearchAPH and TEL Earnings Estimate Revision TrendThe Zacks Consensus Estimate for APH’s 2025 earnings is pegged at $3.29 per share, reflecting a 2.2% upward revision over the past 30 days. This indicates a 74.07% increase year over year.Image Source: Zacks Investment ResearchThe Zacks Consensus Estimate for TEL’s fiscal 2026 earnings is pegged at $10.56 per share, up by 11.4% over the past 30 days. This indicates a 20.55% increase year over year.Image Source: Zacks Investment ResearchWhy Amphenol is a Better StockAmphenol stands out as the stronger stock. Its strong revenue and earnings growth, exceptional operating margins, and dominant positioning in AI-driven datacenter interconnects give it a sharper near-term and long-term edge over TE Connectivity. Amphenol’s aggressive design-win momentum, successful acquisitions and faster growth outlook further strengthen its case. Meanwhile, TE Connectivity offers steady performance but faces more uneven end-market exposure. With superior YTD share performance, stronger earnings revisions and broader exposure to high-growth technologies, Amphenol appears better positioned to deliver outsized returns, making it the more compelling buy today.With a Zacks Rank #1 (Strong Buy), Amphenol stands ahead of TE Connectivity, which is rated Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.Free Report: Profiting from the 2nd Wave of AI ExplosionThe next phase of the AI explosion is poised to create significant wealth for investors, especially those who get in early. It will add literally trillion of dollars to the economy and revolutionize nearly every part of our lives.Investors who bought shares like Nvidia at the right time have had a shot at huge gains.But the rocket ride in the "first wave" of AI stocks may soon come to an end. The sharp upward trajectory of these stocks will begin to level off, leaving exponential growth to a new wave of cutting-edge companies.Zacks' AI Boom 2.0: The Second Wave report reveals 4 under-the-radar companies that may soon be shining stars of AI’s next leap forward.Access AI Boom 2.0 now, absolutely free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Amphenol Corporation (APH): Free Stock Analysis Report TE Connectivity Ltd. (TEL): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks