Amphenol Corporation APH is strengthening its position in the defense electronics market as governments worldwide increase investments in military modernization and advanced defense capabilities. Rising geopolitical tensions and growing demand for next-generation military technologies are creating opportunities across areas such as missile defense, smart munitions, radar systems and secure communications — all of which require highly reliable interconnect solutions.
The company has steadily expanded its defense presence through both organic investments and acquisitions, including Trexon. The acquisition strengthened APH's portfolio of specialized wire, cable and interconnect solutions used in aerospace and defense applications, complementing its broader RF and connectivity offerings. These capabilities are helping the company serve both established defense contractors and a growing group of emerging defense technology providers.
The defense market accounted for 8% of APH's first-quarter 2026 sales and grew 44% year over year in U.S. dollars, including 25% organic growth. The strength was broad-based, spanning multiple defense applications and geographies, highlighting the company's growing exposure to military modernization efforts worldwide.
Demand trends also remain favorable heading into the second quarter, with defense sales expected to increase in the high single-digit range sequentially. Supported by strong execution and expanding opportunities across defense markets, the segment could emerge as a long-term growth driver for Amphenol.
APH Faces Rising Competition
Some of APH’s competitors in the defense space include TE Connectivity plc TEL and Bel Fuse Inc. BELFB.
TE Connectivity continues to benefit from rising defense spending through its portfolio of ruggedized connectors, sensors and electronic components used in military vehicles, communications systems and aerospace platforms. TEL reported 5% organic growth in its Aerospace, Defense and Marine segment in the second quarter of fiscal 2026.
Bel Fuse is sharpening its focus on defense and aerospace opportunities through its Aerospace, Defense & Rugged Solutions segment. By combining connectivity and power technologies for mission-critical applications, BELFB is enhancing its ability to serve defense, space and rugged industrial markets while expanding its role as a solutions provider. In the first quarter of 2026, the unit’s sales rose 20.1% year over year.
APH’s Share Price Performance, Valuation & Estimates
Amphenol’s shares have surged 64.7% over the past year, outperforming the broader Zacks Computer and Technology sector’s 42.6% growth.
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Amphenol shares are trading at a premium, as suggested by a Value Score of D. In terms of the forward 12-month price-to-earnings (P/E), APH is trading at 29.87X, higher than the sector’s 24.60X.
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The Zacks Consensus Estimate for Amphenol’s 2026 earnings implies 42.5% growth from the year-ago period.
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APH currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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This article originally published on Zacks Investment Research (zacks.com).
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