Amphenol's growth now runs mostly through data-centre connectors

Amphenol makes connectors, cables, antennas and sensors for cars, aircraft, factories, phones and data centres, and it still presents itself as a company with diversified end markets. Its sales say something narrower. In the September 2026 quarter the company sold $10.2 billion of goods, and 48% of that went into what it calls IT datacom, the cabling and connectors inside data centres. In the first quarter of the year that share was 41%.

The growth is even more concentrated than the sales. Datacom sales rose 30% from the second quarter, when management had guided in July to a mid-teens increase. Applying the company's rounded shares to reported sales, datacom supplied about three-quarters of Amphenol's whole increase over the second quarter. Chief executive Adam Norwitt said "the vast majority of our sequential growth was related to AI", and put artificial-intelligence work at about three-quarters of datacom sales. He also said nothing had been pulled forward from later quarters; the company had simply met what customers asked for.

Against that, the guidance for the fourth quarter looks modest. The company expects sales of $10.3 billion to $10.5 billion, which, calculated against the third quarter's reported sales, is growth of between 0.7% and 2.6%. The third quarter itself grew 16.8% on the second. Read alone, the range suggests the business that has carried the company is about to level off.

Amphenol's own record argues against reading it alone. Sales have finished above the top of the range guided a quarter earlier in each of the last 25 quarters, an unbroken run; in the last four the margin was between 5.6% and 8.9%. That shows how the guidance has behaved, not why, and it says nothing certain about the fourth quarter. The new range also assumes constant exchange rates and leaves out three acquisitions that have not closed.

Orders give a second reading. Amphenol booked record orders in the quarter, for a book-to-bill ratio, orders received divided by sales, of 1.19. That still leaves orders well ahead of shipments, but the ratio has eased from 1.24 in the first quarter. Norwitt said customers have spent the past year placing orders further ahead, so part of that surplus covers more than the next three months.

The same dependence shows up in the year's largest acquisition. Management's guidance for CommScope's 2026 sales has gone from $4.1 billion in January to $5.1 billion now, and Norwitt said its datacom sales should be roughly half of its full-year total, compared with around a third last year. Outside datacom the picture is weaker: Amphenol's sales to broadband and other network operators, its communications networks market, fell 28% from a year earlier on an organic basis, which excludes acquisitions and currency.

Operating margin held at 29.5% in both the second and third quarters, so profit has been moving with volume, and volume with datacom. Management expects datacom sales to rise again by a mid-single-digit percentage in the fourth quarter. With that market now close to half the company, how fast it grows will do most to set how the fourth quarter compares with the guidance.