Amphenol lifts 2026 outlook to $36.9 billion to $37.1 billion on AI demand

Amphenol's quarter shows how far the AI spending wave has spread beyond chipmakers. The company's IT datacom segment grew 117% year over year and 77% organically, with sequential growth of 30% that management said substantially exceeded its initial expectations. CEO R. Adam Norwitt attributed most of that sequential gain to AI applications, and when an Evercore ISI analyst asked whether the strength was accelerated shipments, he said there was no material pull-forward of business.

The picture is uneven across end markets. Industrial sales rose 60% year over year and defense advanced 42%, while communications networks saw organic sales decline 28%, and Norwitt expects further sequential weakness there in the fourth quarter, particularly from reduced broadband spending. Record orders of $12.2 billion give management visibility across most markets even as that one segment cools.

Profitability held up alongside the growth. Adjusted operating margin reached 29.7%, expanding 220 basis points year over year, which CFO Craig Lampo credited to operating leverage, disciplined cost management and higher-value technology offerings. Amphenol currently carries a Zacks Rank #2 (Buy), though that ranking can change as analysts revise estimates following the reported results.