Joseph C Giordano, an analyst from TD Cowen, maintained the Hold rating on Amphenol. The associated price target was raised to $85.00.
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Joseph C Giordano has given his Hold rating due to a combination of factors related to Amphenol’s recent performance and market dynamics. While the company’s results have been impressive, there was a notable market reaction during the earnings call when management discussed the pull forward of AI sales, which exceeded customer expectations. This situation highlights the sensitivity of Amphenol’s elevated valuation to quarter-over-quarter changes, particularly in its AI business, which is expected to grow significantly this year and next.
Despite the anticipated growth, the third quarter is projected to experience a sequential decline, marking the first such occurrence since the beginning of this growth phase in 2023. Although this decline is not seen as problematic for the business, it underscores the volatility associated with being heavily involved in the AI sector. Additionally, with Amphenol’s valuation nearing historical highs, there is a risk of compression if the sequential growth pattern does not pick up in the fourth quarter. This scenario exemplifies the delicate balance required in navigating the AI market, leading to the Hold rating.
C Giordano covers the Industrials sector, focusing on stocks such as Symbotic, ABB Ltd, and Emerson Electric Company. According to TipRanks, C Giordano has an average return of 11.4% and a 63.87% success rate on recommended stocks.
In another report released yesterday, Bank of America Securities also maintained a Hold rating on the stock with a $110.00 price target.