TE Connectivity Ltd.

(New York Stock Exchange)
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Somewhat Bullish +40

TE Connectivity’s Record Orders Say the AI Trend Is Real — Its Stock Reaction Says Guidance Still Rules

AI infrastructure Acquisition Earnings report AI-generated analysis

📈 TE Connectivity reported record fiscal third-quarter net revenue of $5.16 billion, a 14% year-over-year increase driven by AI data center demand.

💰 Adjusted earnings per share surged 22% to $2.94, surpassing analyst estimates of $2.85 with operating margins expanding to 22%.

📦 Order flow hit a record $5.7 billion, marking over $1 billion in incremental bookings versus the prior year period.

🤝 The company signed a $1.4 billion agreement to acquire Astrodyne TDI to expand its power management and filtering solutions.

📉 Shares dropped roughly 7% after earnings due to market focus on sequential guidance slowing from Q3 growth rates.

🔮 Fourth-quarter guidance projects sales of $5.25 billion and adjusted EPS of $3.05, showing double-digit growth but lower than Q3.

💵 TEL trades at a forward P/E of 16x, offering a discount to the technology hardware median of 21x and its own 10-year average of 28.5x.

🏦 Institutional ownership increased significantly, with 72 top funds holding stakes in Q1 2026 compared to 62 in Q4 2025.

Bullish Signals
  • TE Connectivity achieved record fiscal third-quarter net revenue of $5.16 billion, up 14% year-over-year, driven by strong AI infrastructure demand.
  • Adjusted earnings per share increased 22% to $2.94, exceeding Wall Street estimates and demonstrating robust profitability with operating margins at 22%.
  • The company secured a record order flow of $5.7 billion, including over $1 billion in incremental bookings compared to the prior year.
  • TE Connectivity signed a definitive agreement to acquire Astrodyne TDI for $1.4 billion to strengthen its power management portfolio.
Risk Factors
  • Shares fell approximately 7% following the earnings release as investors reacted negatively to the sequential slowdown in fourth-quarter guidance.
  • Fourth-quarter sales guidance of $5.25 billion represents a significant deceleration from the 27% order growth seen in the third quarter.
Full Analysis
TE Connectivity (NYSE: TEL) reported a record fiscal third quarter in 2026, driven by surging demand for high-density connectors and power-filtering devices essential to AI data center infrastructure. Net revenue rose 14% year-over-year to $5.16 billion, exceeding Wall Street expectations by over 3%, while adjusted earnings per share climbed 22% to $2.94. The company highlighted a record order flow of $5.7 billion, reflecting more than $1 billion in incremental bookings compared to the prior year. Despite the strong historical performance, TEL shares fell approximately 7% following the earnings release as investors focused on management's guidance for the fourth quarter. The fiscal fourth-quarter outlook projected sales of about $5.25 billion and adjusted EPS of $3.05, representing robust double-digit growth but a significant sequential slowdown from the third quarter's expansion rates. This divergence between trailing record performance and forward guidance dampened immediate market sentiment. Strategically, TE Connectivity signed a $1.4 billion agreement to acquire Astrodyne TDI to bolster its power management portfolio for industrial and semiconductor applications. The company maintains a forward price-to-earnings ratio of roughly 16x, trading at a discount to both the broader technology hardware median and its own historical average. Institutional investors have increased their stakes, with 72 top funds holding positions in Q1 2026 compared to 62 in the previous quarter.