By Mackenzie Tatananni

Shares of Amphenol, the maker of fiber-optic cables and connectors, have surged 81% this year. Some analysts expect those gains to continue.

BofA Securities upgraded Amphenol to Buy from Neutral on Wednesday, raising its target for the stock price to $150 from $120. Artificial intelligence is "driving interconnect demand even higher," the bank said.

Amphenol ended the session up 2.4% at $125.60. The updated price target suggests a further 19% gain.

BofA Securities expects upside to earnings in 2026 due to higher-than-expected AI rack sales and continuous announcements of plans to build data centers. Both factors imply there will be more need for cables and connectors.

The continued growth of AI is at the core of BofA's positive view. This is to be expected because Amphenol's IT datacom business, which includes data-center customers, is its fastest-growing division. Sales in the segment more than doubled year over year in the second quarter.

But the bank sees other opportunities for Amphenol, both as a result of technological innovation and because its gear is used outside of the AI world, as well as in it.

BofA sees opportunities for the company to innovate further as co-packaged optics, a technology that combines optical and electronic components into one piece of hardware, become "an increasing part of the narrative" for the data-center buildout.

Amphenol itself noted in a blog post that CPO technology was becoming "a desirable alternative for high-speed, intra-data center interconnects," and one that maximizes energy efficiency. However, using the technology "brings challenges related to thermal management, integration complexity, and manufacturability," the company wrote.

BofA echoed this point on Wednesday, writing that the shift to CPO technology "still will take time." Amphenol's pending acquisition of CommScope's Connectivity and Cable Solutions, announced in August, gives the company an opportunity to expand its fiber-optic interconnection capabilities in the meantime, the analysts said.

Amphenol was named a Barron's stock pick earlier this year. Since an article recommending the stock was published on Jan. 30, shares have gained 75%.

Barron's noted in a follow-up story last month that the maker of interconnection equipment, sensors, and antennas has a foothold not only in the data-center market, but also in the market for electric vehicles, which is still expected to continue to grow despite Tesla's troubles.

BofA, too, sees opportunities beyond AI, citing growth in the industrial and auto markets. Sustained demand for connectors from the military and higher-than-expected commercial aircraft deliveries should also be a boon to the stock, it said.

Amphenol's strength outside AI, in BofA's view, "is a testament to the company's strong execution." This includes what the firms refers to as a "strong M&A acquisition cadence," which is driving growth.

Wall Street is generally upbeat about the stock. Fifteen of 22 analysts polled by FactSet rate Amphenol at Buy or Overweight. Seven others rate the stock at Hold.

Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

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October 15, 2025 16:21 ET (20:21 GMT)

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