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This Electrical Components Supplier’s Earnings Show No Signs of AI Bubble

Oct 29, 2025 06:06:00 -0400 by Al Root | #Manufacturing #Earnings Report

TE’s energy business, which sells into electricity markets, another facet of the AI trade, grew 20% in the quarter. (Dreamstime)

Key Points

There’s no sign of an artificial intelligence spending slowdown in earnings from electrical components supplier TE Connectivity . It delivered a strong finish to its fiscal year and, more importantly, expects a strong start to fiscal 2026, with even more AI growth.

TE reported Wednesday fiscal fourth-quarter earnings per share of $2.44 from sales of $4.8 billion. Wall Street was looking for $2.29 a share and sales of $4.6 billion, according to FactSet. A year ago, in the fourth quarter of 2024, TE reported EPS of $1.95 from sales of $4.1 billion.

Orders came in at $4.7 billion, up 22% year over year and 5% higher than the fiscal third quarter.

For the full year, adjusted EPS was $8.76, a record for the company.

Shares gained traded as high as $246.13 and closed at $240.80, up 1.7%, while the S&P 500 finished flat and the Dow Jones Industrial Average dropped 0.2%.

“These results against an uneven macro environment demonstrate the strategic positioning of our portfolio and the investments we’ve made to broaden the business to benefit from long-term growth trends,” said CEO Terrence Curtin. “We are well-positioned to keep capitalizing on these and other key long-term growth trends.”

Looking ahead, TE expects fiscal 2026 first-quarter EPS of $2.53 from sales of $4.5 billion. Wall Street currently projects EPS of $2.16 and sales of $4.3 billion.

Investors should note that an accounting change to how TE treats amortization impacts comparability. The $2.53 guidance is comparable to $2.05 a year ago, and not the reported $1.95. Still, growth looks solid, and the forecast is above the Street’s call, even if a dime was added to analyst estimates.

TE stock reflects positive business momentum. Coming into Wednesday trading, shares were up about 65% this year, partly boosted by the AI data center buildout.

AI-related business amounted to roughly $900 million in fiscal year 2025, up from $300 million in fiscal year 2024. Curtin expects more growth in 2026. Another $600 million of growth is possible. That isn’t a tripling, but it is continued business momentum.

AI is booming. TE’s energy business, which sells into electricity markets, another facet of the AI trade, grew 20% in the quarter.

Automotive and general industrial markets are part of the more “uneven” business backdrop he mentioned. Global car production was roughly flat in TE’s fiscal year. That’s the company’s expectation for fiscal year 2026 as well.

As for industrial markets, TE sees signs the factory automation business is picking up. Things tied to interest rates, such as appliances and air conditioning, however, remain slow.

Record earnings without all business segments humming is an accomplishment, while leaving some room for improvement down the road. Investors have AI and TE’s business execution to thank for that.

Write to Al Root at allen.root@dowjones.com