Shares in electrical, electronic, and fiber-optic connector company Amphenol (APH 2.29%) slumped by more than 11% as of 3 p.m. today. The move comes after the release of its fourth-quarter earnings report, and it's more a reflection of the market's thinking about stocks with artificial intelligence (AI) exposure than a "vote" on the company's results.
Amphenol earnings and guidance
The company has gone from being an unexciting interconnection and industrial cabling company to a favored play on AI-led spending. After all, interconnects are essential for moving power and data. As such, Amphenol's growth has exploded in line with increased AI spending. The company's sales rose a whopping 49% in the fourth quarter, and increased 37% on an organic basis.
NYSE: APH
Key Data Points
Management expects the momentum to carry through into 2026 and guided to $6.9 billion to $7 billion in sales for the first quarter, representing year-over-year growth of 43% to 45%.
Why the stock declined
While those growth figures are impressive enough, the company went into the results on the back of a slew of upgrades from heavyweight brokers, and its guidance wasn't quite enough to sustain that investor fervor.
Image source: Getty Images.
It's the kind of outcome that typifies the skittishness around investing in the AI theme right now. However, investors should note that the stock is still up by almost double-digits in 2026, even after today's correction. There's plenty of speculative money in AI-centric trades, but there's a reason why such stocks are seen positively, and a 44% growth rate is hardly a sign of any kind of slowdown.
