This Could Be One of the Best Growth Stock Buys in Today’s Market

A global supplier of connectors, sensors, and interconnect systems, Amphenol is benefiting massively from artificial intelligence infrastructure investments with its best-of-breed data center connector portfolio. While we appreciate the data center opportunity, we continue to see the company as a well-diversified growth story, with exceptional industrial and defense growth, too. We raised our fair value estimate for this wide-moat stock by $20, to $190 per share, after earnings. The shares trade 33% below that, offering investors an opportunity to buy a phenomenal growth story at a big discount. Amphenol was one of Morningstar Chief US Market Strategist Dave Sekera’s stock picks of the week on a recent episode of The Morning Filter podcast.

We think Amphenol is a differentiated connector supplier, an excellent operator, and an exceptional steward of shareholder capital. Its broad array of end markets allows the company to expand its top line even in an individual market downturn. Its singular ability to effect cost controls gives it the highest operating margins of its peer group, allowing it to quickly bring its numerous acquisitions up to companywide profitability. We expect AI revenue to become Amphenol’s primary growth driver over the medium term but remain less than half of sales, with excellent placement in server configurations from Nvidia and others.

Key Morningstar Metrics for Amphenol

• Fair Value Estimate
  : $190
• Star Rating
  : 5 Stars
• Economic Moat Rating
  : Wide
• Uncertainty Rating
  : Medium

Economic Moat Rating

We think Amphenol has a wide economic moat based on switching costs and intangible assets. These moat sources, paired with Amphenol’s superior cost management, lead to strong returns on invested capital that we expect to endure, more likely than not, for the next 20 years. In our view, Amphenol has earned the trust of risk-averse manufacturing customers across niche markets thanks to its flawless operating history. It designs components into mission-critical systems like electric vehicle battery management systems, advanced driver-assistance systems, avionics systems, and power grids. The company is highly integrated into its customers’ processes. Amphenol also boasts strong design and engineering abilities, in our view.

Read more about Amphenol’s moat rating.

Fair Value Estimate for Amphenol Stock

Our fair value estimate is $190 per share, which implies a 2026 adjusted price/earnings multiple of 37 times and an enterprise value/sales multiple of 7 times. We expect the top line to grow at a 19% compound annual rate through 2030, including more than 45% growth in 2026. In the longer term, we see normalized growth in the high single digits, though we expect AI infrastructure investments to provide upside to this over the medium term. We expect non-GAAP operating margin to remain in the high 20s for the medium term, reaching 30% in 2030. We believe rapidly rising AI sales volume across a relatively concentrated customer base is providing strong leverage to further strengthen Amphenol’s already-strong margin profile and maintain these best-in-class levels.

Read more about Amphenol’s fair value estimate.

Risk and Uncertainty

Amphenol must constantly innovate and refresh its product portfolio to avoid commoditization and maintain its competitive advantage. It derives roughly 40% of its sales from communications markets, including the cyclical mobile devices market. This concentration could make the company susceptible to a broader downturn. Amphenol could also face risk from its global operating model. With most sales outside the US and nearly one-third from China, any trade uncertainties between the US and other nations could hamper Amphenol’s sales. In addition, Amphenol could face downside risk from its acquisition strategy.

Read more about Amphenol’s risk and uncertainty.

Amphenol Bulls Say

• Amphenol is the most diversified component supplier we cover, giving it better insulation from a cyclical downturn in any one market.
• Amphenol has more than 125 general managers who operate with high levels of autonomy. This brings an unparalleled ability to control costs and maintain industry-leading margins.
• Amphenol benefits from sticky customer relationships, thanks to its ability to create customized products in mission-critical applications for harsh conditions.

Amphenol Bears Say

• Amphenol relies on M&A to maintain top-line growth. Rising valuations could cause it to overpay for a target or make an ill-advised purchase.
• Amphenol derives about 25% of its revenue from new products. Any slowdown in its ability to innovate could hamper its growth prospects.
• Amphenol derives almost a third of its revenue from China. Any potential trade restrictions between the US and China could pose a threat to its revenue from the region.

This article was compiled by Susan Dziubinski and Sylvia Hauser. Data as of May 12, 2026, close unless otherwise noted.