TE Connectivity plc
Information Technology · Electronic Components
Structural: TE sits in the picks-and-shovels layer of two compounding cycles - vehicle electrification (more connectors per car, higher-voltage interconnects) and AI compute (high-speed backplane + DAC/AEC cable assemblies inside $NVDA / $AMD accelerator trays, plus optical interconnect content at the rack level).
Communications Solutions revenue inflected on the GB200 / MI300X cycle; AI/datacenter is now a stated double-digit growth pillar inside a mid-single-digit company.
(1) AI server interconnect content scales with bandwidth (224G PAM4 → 448G), connectors get more expensive per port; (2) EV connector dollar-content per vehicle is structurally higher than ICE, and TE is a top-3 share holder; (3) industrial automation + factory electrification tailwind from re-shoring capex; (4) ~$2-3B annual buyback + dividend, low-teens FCF yield at depressed multiples vs $APH; (5) GICS electronic components reratings tend to lag $APH by 6-12 months.
(1) Transportation Solutions = ~50% of revenue, exposed to global auto SAAR + China EV pricing war; (2) AI server connector $TAM is real but $APH owns the marquee design wins, TE often quoted as the #2 supplier; (3) industrial segment soft into 2026; (4) FX headwind on euro-denominated cost base; (5) re-rating already partly priced - multiple sits above 5y average.
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