Arrow Electronics, a supplier of AI chip components and consulting services, has surged 104% this year and remains undervalued despite strong earnings growth.

What happened: Arrow Electronics reported Q1 revenue of $9.5 billion（約1.5兆円）, up 39% year over year, with earnings jumping 201% to $4.55 per share. The company's Enterprise Computing Solutions consultancy arm generated $2.8 billion（約4500億円） in revenue, complementing its $6.6 billion（約1.1兆円） components business. For Q2, management is guiding overall revenue between $9.15 billion（約1.5兆円） and $9.75 billion（約1.6兆円）, with adjusted earnings expected to be $4.32 to $4.52 per share, up 81% year over year.

Why it matters: Arrow has shifted from simply distributing semiconductor chips to serving as a strategic partner that helps manufacturers design and build AI systems—a role that addresses a critical gap in the complex AI hardware supply chain. This transformation into a consultancy and components provider has captured investor interest; analysts have raised price targets, and the stock jumped about 15% following the May 7 earnings report.

What to watch: Despite a year-to-date gain of 104%, Arrow trades at a forward P/E ratio of only 11 and a five-year PEG ratio of 0.35, suggesting room for appreciation. Truist raised its price target to $260 per share (indicating 16% upside), and Bank of America boosted its target to $233 per share.