TEL is an AI-era infrastructure compounder: 800V power delivery, disaggregated networking, and diversified industrial/auto demand create durable double-digit growth and margin upside.
The AI optionality is already in the stock; with AI revenue tracking below target and valuation reflecting long-term upside, risk/reward skews negative.
Networking/connectivity names, including TEL, should benefit as disaggregated inference drives more east-west traffic.
SNDK is viewed as the clearest beneficiary as KV cache and suspended agent state spill into flash, while WDC/STX benefit from logs/traces, P/NTAP from enterprise context storage, and DELL/HPE from higher CPU/DRAM/NAND content. Networking/connectivity names...
The firm highlighted AI as an emerging growth driver, with AI-related revenue expected to more than double from ~$1.4B in FY25 to ~$3B, while energy infrastructure and grid spending continue to provide underappreciated multi-year tailwinds.
ISI also remains positive on TEL’s margin expansion potential and automotive content gains, but sees a less favorable near-term risk/reward after the stock’s recent outperformance.
ISI downgraded TE Connectivity to In Line, arguing the stock’s valuation now adequately reflects its long-term opportunities despite remaining constructive on the business.
The shift from traditional 48V architectures to 800V power delivery in AI datacenters creates a multi-billion-dollar opportunity, driven by rising rack power requirements and the need to reduce amperage, heat, and copper intensity. TEL is among the best-positioned beneficiaries, with opportunities spanning power interconnects, power management, wide-bandgap semiconductors, and grid infrastructure. The AI power interconnect TAM could expand from roughly $2B today to over $4B by 2028, while power management and WBG-related opportunities grow into multi-billion-dollar markets. Power is becoming a critical bottleneck in AI infrastructure, creating a new investment cycle that extends well beyond GPUs and networking.
The company reported solid Q4 results, beating street expectations on revenue and EPS.
Sales were up 22% year-over-year (+15% organic) driven by strength in both Transportation and Industrial segments.
Orders reached a record $5.1 billion, with a 1.1x book-to-bill ratio, led by Energy and DDN.
Transportation segment grew 10% year-over-year with 21.2% margins despite concerns about the auto sector.
Industrial segment surged 38% year-over-year with 23.3% margins due to AI-driven momentum.
The March-quarter guide for revenue was in-line and slightly ahead on EPS, implying approximately 13% year-over-year growth.
AI revenues are only tracking in-line to slightly below the FY26 target.
Research through 2026-10-01 · 2026-01-21 to 2026-10-01 · 6 source reports.
| Range | Prices through |
|---|---|
| 1W | |
| 1M | |
| 3M | |
| 6M | |
| 1Y | |
| 2Y | |
| 3Y |
Research through 2026-11-03. Artifact validity does not establish factual accuracy or research freshness.