Amphenol stock rating upgraded to Buy at BofA on AI growth potential

Investing.com - BofA Securities upgraded Amphenol (NYSE:APH) from Neutral to Buy on Wednesday, while raising its price target to $150.00 from $120.00. The stock, which has delivered an impressive 88% return over the past year according to InvestingPro data, currently trades near its 52-week high of $127.50.

The upgrade reflects BofA’s optimistic outlook on Amphenol’s artificial intelligence (AI) growth prospects, with the firm citing potential upside to 2026 estimates driven by higher-than-expected AI rack volume and 2027 estimates benefiting from incremental content in new architectures. This optimism appears well-founded, as InvestingPro data shows the company achieved 40.5% revenue growth in the last twelve months, with analysts forecasting continued strong growth ahead.

BofA highlighted increased data center build announcements that will drive higher volumes for Amphenol, along with reduced risk to 2028 as a potential "cliff year" since the shift to co-packaged optics will take time to materialize.

The firm expects Amphenol to achieve mid-teens organic growth from 2026 to 2028, supported by the company’s CCS acquisition which provides opportunities to expand participation with fiber.

Beyond AI-related growth, BofA noted Amphenol’s strong M&A acquisition cadence driving inorganic growth, while projecting mid-single digit organic growth excluding the AI segment.

In other recent news, Amphenol Corporation has entered into two unsecured delayed draw term loan agreements totaling $4 billion to support its planned acquisition of CommScope Holding Company’s Connectivity and Cable Solutions business. The financing includes a three-year, $2 billion loan and a separate 364-day, $2 billion loan, arranged with a syndicate of financial institutions, with JPMorgan Chase Bank serving as the administrative agent. Additionally, Amphenol announced a definitive agreement to acquire Trexon, a provider of high-reliability interconnect and cable assemblies, for approximately $1 billion in cash. This acquisition is anticipated to contribute about 1.3% to Amphenol’s sales and earnings per share within two years post-closing, as noted by Truist Securities, which has maintained a Buy rating on the stock. Evercore ISI has raised its price target for Amphenol to $120 from $110, citing the company’s expanding artificial intelligence portfolio. The firm also noted a rise in Amphenol’s quarterly AI revenue, with a book-to-bill ratio of 0.98:1 and a sequential order increase of approximately 4%. The Trexon acquisition is expected to close in the fourth quarter of 2025.

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