Amphenol’s Growth Potential in AI Sector Tempered by Macroeconomic Challenges: Analyst Maintains Hold Rating

Amphenol (APH – Research Report), the Technology sector company, was revisited by a Wall Street analyst yesterday. Analyst Wamsi Mohan from Bank of America Securities reiterated a Hold rating on the stock and has a $90.00 price target.

Wamsi Mohan has given his Hold rating due to a combination of factors affecting Amphenol’s stock. The introduction of NVLink Fusion by NVIDIA is expected to expand Amphenol’s total addressable market (TAM) in the AI sector, providing a positive outlook for the company’s cabling products. However, despite this growth potential, Mohan maintains a cautious stance due to broader macroeconomic challenges that could offset these gains.
While the NVLink Fusion announcement is anticipated to be beneficial for Amphenol, the preference among cloud service providers is likely to remain with NVIDIA’s traditional Grace Blackwell systems. This suggests that while there is an opportunity for incremental TAM expansion, it may not be as significant as initially hoped. Consequently, Mohan has left the company’s earnings estimates unchanged but has slightly raised the price objective to $90, reflecting the increased TAM potential while still considering the existing market uncertainties.

Based on the recent corporate insider activity of 67 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of APH in relation to earlier this year.