Amphenol's Data Center Business Poised for Growth Amid Rising Demand

Amphenol APH designs interconnect systems, antennas, and high-speed cables for cloud infrastructure, automotive, and industrial electronics. The global data center market is projected to reach $652 billion by 2030, driven by AI workloads, hybrid cloud models, and increasing demand for dense, thermally intensive compute environments. APH's Communications Solutions segment supports large-scale data centers with high-speed interconnects and signal transmission systems. The company faces competition from TE Connectivity TEL and CommScope COMM but has expanded its AI-focused portfolio with OCP-compliant liquid cooling connectors. APH's shares have appreciated 43.2% year to date, and the Zacks Consensus Estimate for 2025 earnings is pegged at $2.67 per share, up 41.27% year over year.

Amphenol APH, a leading designer and manufacturer of interconnect systems, antennas, and high-speed cables, is poised to benefit from the burgeoning global data center market. The market is projected to reach $652 billion by 2030, driven by the surge in AI workloads, the rise of hybrid cloud models, and increasing demand for dense, thermally intensive compute environments [1].

Amphenol's Communications Solutions segment supports large-scale data centers with high-speed interconnects and signal transmission systems. This segment reported $2.41 billion in revenues during the first quarter of 2025, accounting for 50.2% of total revenues [1]. The Zacks Consensus Estimate for the segment's revenues in the second quarter is pegged at $2.47 billion [1].

The company faces stiff competition from established players such as TE Connectivity (TEL) and CommScope (COMM), but Amphenol has expanded its AI-focused portfolio with OCP-compliant liquid cooling connectors designed to address rising thermal demands in AI-driven infrastructure [1]. This addition broadens its system-level offering, enabling Amphenol to support both connectivity and thermal management across next-gen data center environments.

Amphenol's shares have appreciated 43.2% year to date, while the broader Zacks Computer & Technology sector has jumped 7.5% and the Zacks Electronics - Connectors industry has returned 43.8% [1]. The company's stock is trading at a premium, with a forward 12-month Price/Earnings of 35.48X compared with the sector’s 27.39X. The Zacks Consensus Estimate for Amphenol’s 2025 earnings is pegged at $2.67 per share, up 41.27% year over year [1].

Broadcom Inc. (AVGO) has also announced the shipment of its new Ethernet switch, the Tomahawk Ultra, designed for high-performance computing (HPC) and AI workloads. This switch offers ultra-low latency at 250 nanoseconds and supports a throughput of 51.2 terabits per second, addressing the needs for high reliability and efficiency in demanding computing environments [2]. The introduction of SUE-Lite, an optimized version of the Scale-Up Ethernet specification tailored for resource-sensitive applications, further solidifies Broadcom's commitment to driving Ethernet innovations in AI and HPC.

In conclusion, Amphenol APH and Broadcom Inc. are well-positioned to capitalize on the growing demand for high-performance computing and AI workloads in the data center market. Both companies are investing in next-generation connectivity technologies to meet the evolving needs of these markets.

References:
[1] https://finance.yahoo.com/news/data-center-demand-rising-fuel-124500391.html
[2] https://www.nasdaq.com/articles/broadcom-inc-unveils-tomahawk-ultra-ethernet-switch-high-performance-computing-and-ai