Amphenol defense sales surge 44% as military spending accelerates

Amphenol Corp.'s defense sales jumped 44% year over year in the first quarter, as rising global military spending fueled demand for its interconnect solutions across missile defense, radar systems and secure communications.

The defense segment accounted for 8% of total sales in the period, with organic growth of 25% excluding contributions from the Trexon acquisition, the company said. The broad-based strength spanned multiple defense applications and geographies, highlighting Amphenol's growing exposure to military modernization programs worldwide.

First-quarter adjusted operating margin expanded 380 basis points year over year to 27.3%, supported by strong operating leverage and higher-margin revenue. Orders reached a record $9.4 billion, up 78% from a year earlier, with a book-to-bill ratio of 1.24. The company also announced a 5% price increase on select products on June 15, citing rising raw material costs and surging AI-related demand.

The defense opportunity extends beyond traditional contractors. Amphenol has expanded its portfolio through acquisitions including Trexon, which added specialized wire, cable and interconnect solutions for aerospace and defense applications. The company now serves both established defense primes and a growing cohort of emerging defense technology providers. Second-quarter defense sales are expected to rise in the high single digits sequentially, according to the company.

Competition Intensifies in Defense Electronics

Amphenol faces growing competition from TE Connectivity and Bel Fuse in the defense interconnect market. TE Connectivity's Aerospace, Defense and Marine segment posted 5% organic growth in its fiscal second quarter, while Bel Fuse's Aerospace, Defense & Rugged Solutions unit reported a 20.1% sales increase in the first quarter.

Amphenol's broader diversification provides a buffer. The company generates revenue across automotive, industrial, commercial aerospace, mobile devices and data communications, with AI infrastructure emerging as a major demand driver. Its $10.5 billion acquisition of CommScope's CCS business expanded fiber-optic and high-speed interconnect capabilities, strengthening its ability to deliver end-to-end connectivity across copper, power and optical networks.

Valuation Reflects Growth Premium

Amphenol shares have gained 64.7% over the past year, outperforming the broader computer and technology sector's 42.6% advance. The stock trades at 29.99 times forward earnings, above its five-year median of 29.19 times and the industry average of 28.12 times. By comparison, TE Connectivity trades at 17.25 times and Belden at 12.73 times forward earnings.

The premium reflects investor confidence in Amphenol's positioning across AI infrastructure, defense and next-generation connectivity. The company has delivered earnings beats in each of the past four quarters, averaging a 14.1% surprise. Consensus estimates call for 42.5% EPS growth in 2026 and 18.1% in 2027, with revenue projected to rise 44.4% and 14.7%, respectively.

The sustained defense spending momentum, combined with AI-driven data center investment, gives Amphenol two structural growth engines heading into the second half of 2026. Investors will watch second-quarter results for further margin expansion and order momentum as the company executes on its defense and AI infrastructure backlog.

This article is for informational purposes only and does not constitute investment advice.