Dominate both the copper cable and fiber optic markets! Evercore is bullish on Amphenol (APH.US) and its dual-entry into the AI Internet of Things track, giving it an "outperforming the market" rating.

Investment bank Evercore has stated that Amphenol (APH.US) may still be considered a "core asset" worth holding in the near future, giving it an "outperform" rating with a target price of 180 US dollars. Evercore ISI analyst Amit Daryanani wrote in a report to clients, "We believe that Amphenol remains a core asset worth holding. With demand being driven by artificial intelligence, merger benefits, and diversified growth in non-data communication terminal markets, the company has the ability to outperform the market starting from the calendar year 2026 and beyond. Under optimistic circumstances, we believe that Amphenol's earnings per share (EPS) next year could reach around 6.00 US dollars, with the stock price potentially moving towards over 220 US dollars. Looking ahead, continuous double-digit revenue growth combined with over 30% margin profit growth could potentially raise earnings per share to around 8.00 US dollars." Market leader in AI connectors Daryanani pointed out that upon closer analysis, Amphenol is the market leader in artificial intelligence connectors (including copper cables and fiber optics). He stated that given that customers are still weighing and discussing between copper cables and fiber optics, regardless of the future direction of the industry, Amphenol could potentially become the default connectivity solution partner for customers. He added that Amphenol's fiber optic business is roughly equivalent to that of Corning Inc (GLW.US). In addition, Amphenol completed approximately 5 acquisitions last year, not including the acquisition of CommScope's connectivity and cable solutions business for 10.5 billion US dollars in cash. Following this transaction, the former CommScope business has been renamed Vistance (VISN.US). Daryanani explained that following this transaction, Amphenol's net leverage ratio is around 1.6 times, and it is able to generate 4 to 5 billion US dollars in free cash flow annually, indicating that the company still has room to increase leverage in the future. Other positive factors include the potential for "significant growth" outside of the information technology (IT) and data communication markets, continued increase in profit margins, and the company's strong historical track record of execution. Daryanani added, "Amphenol uniquely combines agility, diversity, and global scale, which remains its core competitive advantage. This will allow the company to maintain long-term double-digit revenue growth, as well as earnings growth of over 15% (high-teens), with lower volatility."