Amphenol Stock Tests $164 as AI Data-Center Orders Hit Record Highs

Amphenol reported $8.8B in sales and $10.7B in orders. The 1.23 book-to-bill ratio indicates strong overall demand for Amphenol’s offerings. In spite of 55% sales growth, investors should consider the strong metrics as strong demand will continue to underpin cash flows in the future.

Management reported GAAP diluted EPS of $1.37 and adjusted diluted EPS of $1.35. The quarter included an $80M net benefit from IEEPA tariff recoveries, worth about $0.04 per share, which boosted operating income and margins. This was all offset by strong bookings.

Amphenol explained very strong organic growth in IT Datacom, where Amphenol supplies high speed copper links, fiber optic interconnects, power connectors and cable assemblies and signal integrity products.

This makes Amphenol a second-order AI beneficiary. The demand for high-speed data exchange is incredible as thousands of processors need to communicate with one another. As a result, the spending on GPUs stimulates the demand for the connectivity surrounding those processing units. September’s manufacturing PMI data indicates demand for AI-related electronic components and products is strong, further strengthening the demandfor manufacturing in Asia.

In January 2026, Conglomerate Amphenol completed its $10.5 billion purchase of CommScope’s Connectivity and Cable Solutions business. Amphenol loves the acquisition more than expected.

Management now expects CommScope’s business to contribute approximately $4.6 billion of revenue and about $0.30 of adjusted EPS prior to the split in 2026. Before the acquisition, CommScope’s business was expected to generate revenue of about $4.1 billion with about $0.15 of EPS.

Management has predicted revenues of $9.3 billion to $9.4 billion for the third quarter of 2026. This indicates a growth rate of 50% to 52% compared to the same quarter a year ago. For the same period, management is expecting adjusted EPS of $1.40 to $1.42 on a pre-split basis ($0.70 to $0.71 post-split).

Since the split does not affect Amphenol’s cash flows, the share split simply doubles the shares and halves the per share figures.

Amphenol’s board approved the stock split shortly thereafter and announced it on August 6. On August 17 Amphenol shareholders were determined to be eligible to receive an additional share for each share of stock, with stock distribution planned for September 2.

The share split in and of itself does not improve the company’s value, but it can lower stock price and improve liquidity. Amphenol’s dividend was maintained at $0.25 per share for the previous quarter prior to the stock split. Post-split dividend was $0.125 per share.

Amphenol produced $1.6 billion of operating cash flow and $1.2 billion of free cash flow during the second quarter. Amphenol returned $515 million to shareholders through share repurchases and dividends while continuing its acquisition strategy.

Amphenol’s strength in cash flow is particularly important, as, unlike with semiconductors, capital expenditures in manufacturing are not required to grow through acquisition.

The backdrop for September is a little less favorable for Amphenol. U.S. manufacturers are reporting the same issues as before: elevated prices for inputs such as copper, aluminum, steel and semiconductors. If commodity prices continue to rise and outpace the company’s ability to pass costs to consumers, margins will be negatively impacted.

Long term U.S. Treasury yields are also valuation concerns. With the U.S. 10 year around 4.81%, growth stocks begin to feel the pinch, even if the demand for Amphenol’s products remains strong

Price of APH is currently $163.18, as supplied in the chart. In this context, price is rebounding from the $151.88 level and is now trading above the $160.69 moving average. Price is continuing to form an upward trend.

Amphenol Price Chart - Source: Tradingview

$164.14 is the immediate resistance level. A sustained 2 hour close above this level would confirm an upward breakout and expose the next resistance level at $171.95, followed by $176.27.

RSI is at 62 and is above the signal line at 51, but is still safely below 70. If price falls, the first support level is likely to be $160.69. Price will likely reach $156.78 and the rising trendline if price continues to fall. A price fall to this level will likely reach $151.88 and ultimately $145.99.

Key Levels

·       Current Price: About $163.18

·       Breakout resistance: $164.14

·       First bullish target: $171.95

·       Second bullish target: $176.27

·       First bearish target $160.69

·       Trendline support: $156.78

·       Second support ($151.88)

·       Third support ($145.99)

·       RSI: Around 62, bullish but not overbought

Amphenol provides high speed copper, fiber, power and signal-integrity components to connect the processors and networking systems in AI data centers. Amphenol benefits from investment in the AI data center infrastructure around GPUs. Amphenol does not benefit from the high-end GPUs used in the AI data center.

A move above $164.14 and a two hour close with a sustained uptrend would verify a higher high and support a move to $171.95.

Amphenol has record orders, strong demand for AI datacom, improved acquisition prices and better cash flow. The stock split does not change the investment case. The main risks include high input costs, increased valuation risks with rising interest rates, and the execution risk of the integration. APH is bullish with a trend above $156.78 to $160.69, with $164.14 the level to trigger the break to $171.95.