This AI rally has quickly turned into a data center rally, and sensible valuations are hard to find. The one glaring exception is Amphenol (NYSE:APH | APH Price Prediction). Before digging into what makes Amphenol compelling, it’s worth surveying the other “pick and shovel” options and the prices investors must pay to own them.
Pick-and-shovel data center stocks tend to deal in wiring, cooling, or other essential infrastructure. Corning (NYSE:GLW) sells fiber optics to data centers and has surged roughly 270% over the past year. Ciena (NYSE:CIEN) sells networking hardware and has ripped even harder. The easy money has almost certainly been made. Investors buying Corning today are paying around 53 times forward earnings; Ciena trades at a similarly steep premium. Both companies are seeing real demand, but revenue growth projections of 15% annually for Corning and 20% to 30% annually for Ciena do not obviously justify those multiples.
APH stock offers something comparable for closer to 30 times forward earnings, and that gap is exactly why the bulk of the gains may still lie ahead. Here is what the business does and why it belongs in a long-term portfolio.
What Amphenol does and why it’s cheap (ish)
Amphenol offers the broadest and most diversified exposure to the data center buildout available in a single stock. It sells connectors, sensors, fiber optic cables, and electrical products that show up in practically every modern technology application. Corning and Ciena are narrower businesses whose entire growth thesis now rests on AI. Amphenol, by contrast, also sells into industrial, defense, communications, and automotive markets, among others.
AI and IT datacom still account for roughly a third of Amphenol’s sales (counting the full IT datacom segment) and drive most of its growth. But the diversification creates a meaningful cushion: a sudden slowdown in data center spending would not produce the kind of catastrophic drawdown that more concentrated peers would face.
That diversification is also why the stock trades at a discount. Analysts expect strong EPS growth in 2026, along with roughly 36% sales growth toward approximately $32 billion for the full year. If every dollar of that growth were labeled “AI,” the market would almost certainly pay a higher multiple. The irony is that the breadth of Amphenol’s exposure arguably deserves a premium, not a discount, because it reduces the single-point-of-failure risk that haunts narrower plays.
The demand is here to stay
Amphenol doubled down on fiber and high-speed cable at the start of 2026 with the closing of its $10.5 billion acquisition of CommScope’s Connectivity and Cable Solutions business on January 9, 2026. The deal, Amphenol’s largest ever, pushed total debt to approximately $18.7 billion, but the CommScope integration is already running ahead of initial expectations. Backlog has more than doubled from $4 billion in 2023 to over $8.4 billion in 2025, and momentum has only accelerated since. In Q1 2026, orders hit a record $9.4 billion and the book-to-bill ratio reached 1.24, meaning Amphenol is booking significantly more new business than it is shipping in any given quarter.
The Q1 2026 results confirmed the thesis in concrete numbers. Revenue came in at $7.62 billion, up 58% year over year and ahead of guidance, with adjusted diluted EPS of $1.06 beating the Street estimate of $0.95. Management guided Q2 2026 revenue to $8.1 billion to $8.2 billion (43% to 45% growth year over year) and adjusted EPS of $1.14 to $1.16, both well above prior Street consensus. The defense segment also grew 25% organically in Q1, showing how thoroughly Amphenol’s revenue base extends beyond AI hype.
The competitive landscape for fiber also keeps intensifying in ways that benefit Amphenol’s customers and, indirectly, Amphenol itself. Meta (NASDAQ:META) signed a $6 billion multiyear fiber supply deal with Corning in January 2026. Since then, Corning has added a roughly $3.2 billion manufacturing partnership with NVIDIA in May and a new multibillion-dollar fiber agreement with Amazon announced in June 2026. The hyperscalers are locking in domestic fiber supply for years, which underscores just how durable the data center buildout really is.
Why APH stock is worth buying over others
Most other data center pick-and-shovel stocks put investors on shaky ground. Buying Corning or Ciena at today’s valuations requires a high degree of confidence that the AI infrastructure build continues without interruption, because any momentum shift could compress multiples sharply. APH is far less cyclical on a relative basis, with enough exposure across defense, automotive, industrial, and space to provide genuine earnings stability even in a softer data center environment.
The forward earnings multiple, now around 30 times, is not far removed from Amphenol’s own historical range, which means investors are not paying a large speculative premium simply to own the stock. If the data center cycle does continue at pace, there is more room for multiple expansion here than at competitors already priced for near-perfection. And if spending cools, Amphenol’s diversification provides a degree of downside protection that concentrated fiber and networking peers simply cannot offer.
Editor’s note: This article has been updated to reflect Amphenol’s Q1 2026 record revenue of $7.62 billion and Q2 2026 guidance of $8.1 billion to $8.2 billion, the January 2026 close of the CommScope CCS acquisition and its $18.7 billion debt impact, the revised APH forward P/E of approximately 30x and Corning’s updated forward P/E of approximately 53x, Corning’s stock gain of roughly 270% over the past year, and Corning’s subsequent major supply agreements with NVIDIA and Amazon announced after the original publication date.
Top Gaining Stocks
Top Losing Stocks