Amphenol seen as 14.8% undervalued on strong earnings expectations

Arista Networks raised its 2026 revenue guidance to US$12.60 billion, including at least US$3.50 billion from AI-related business, after reporting second-quarter fiscal 2026 revenue of US$3.00 billion, a 37.7% year-over-year increase. The higher outlook underscores how AI-driven cloud networking has become a central revenue pillar for the company, shaping its growth mix across hyperscale and enterprise customers. Arista was also added to the S&P 100 in September 2026, a move that reflects its growing weight in large-cap U.S. equity indices just as management ties more of its outlook to AI-related revenue. The company's longer-range narrative projects US$21.4 billion in revenue and US$8.2 billion in earnings by 2029, requiring 26.6% yearly revenue growth and an earnings increase of about US$4.2 billion from US$4.0 billion today. Some of the lowest-ranked analysts had already assumed about US$18.6 billion of 2029 revenue and US$6.9 billion of earnings before this guidance, illustrating how differently Arista's AI exposure and long-term supply commitments can be read.

Nvidia said its board increased its share buyback program by $150 billion, leaving $235 billion in total authorization, the largest buyback program in U.S. history according to data compiled by Bloomberg. Advanced Micro Devices said it would acquire AI model and research lab World Labs in an all-stock transaction valued at nearly $8.2 billion, a deal Citi analyst Atif Malik said gives the company deeper visibility into how AI models are evolving, while RBC analyst Srini Pajjuri said it could help position AMD to offer full-stack solutions for robotics, simulation and physical AI markets. Micron Technology reported fourth-quarter results and an outlook that beat expectations as its strategic customer agreements continued to increase, and Accenture reported fiscal quarterly results that exceeded expectations on both revenue and bookings, sending its shares up nearly 16% on Thursday. HPE closed nearly 4% higher after saying it won a $1.2 billion order of AMD's Helios AI rack from cloud infrastructure company Vultr, and raised its fiscal 2027 networking growth outlook to the high-teens to low-20s on a percentage basis, with data center networking revenue expected to grow at a low-to-high 50s percent compound annual rate through fiscal 2029. Anthropic intends to launch its initial public offering before the Thanksgiving holiday, according to Bloomberg, which also reported that Broadcom's Wall Street syndicate is starting to gather $60 billion of fresh AI chip financing to benefit Anthropic PBC and other companies, while Meta Platforms is adding a new Meta Enterprise Platform for organizations, tapping MongoDB CEO Chirantan Desai to lead it, and introduced Muse for Small Business.

Meta announced Petal on Sept. 21, a roughly 4,300-mile subsea cable connecting the U.S. and France that is expected to enter service in 2029 and will be the first to deliver petabit-scale capacity across an ocean. The cable will carry 1 petabit per second, or about 125,000 gigabytes per second, double what today's most advanced transoceanic cables can handle, using two-core fiber that fits two light paths inside each strand. Petal is one piece of a much larger seafloor empire: Meta says it has invested in more than 20 subsea cable projects touching every continent except Antarctica, led by Project Waterworth, announced in February 2025, which will stretch more than 31,000 miles and connect the U.S., Brazil, South Africa, India, and other regions across five continents. Petal is being developed with Japan's NEC and Sumitomo Electric Industries, with French telecom Orange handling the landing on France's Atlantic coast, while Waterworth will be wholly owned by Meta, only its third solely owned cable according to telecom research firm TeleGeography. Meta has not disclosed what Petal or Waterworth will cost, but TechCrunch reported before Waterworth's announcement that the project could top $10 billion, a small slice of the company's expected capital expenditures of $130 billion to $145 billion this year, nearly double the $72.2 billion it spent in 2025.

Hewlett Packard Enterprise raised its fiscal 2027 networking revenue growth forecast to between high-teens and low-20s percent, up from the 14% to 17% projection it gave earlier in September, and secured a $1.2 billion order from cloud infrastructure provider Vultr for AMD-based artificial intelligence server racks paired with Juniper networking switches. The company also lifted its annual cost-synergy target from the Juniper Networks acquisition to $800 million by the end of fiscal 2028, up from at least $600 million, and projected Data Center Networking revenue to grow at a low-to-high 50s percent compound annual rate through fiscal 2029. Following the networking investor day presentation, Citigroup raised its price target on the stock to $92 from $76 while keeping a Buy rating, citing confidence in durable demand and expanding AI infrastructure orders. A cooler-than-expected U.S. jobs report added secondary momentum, with the Bureau of Labor Statistics reporting that employers added 29,000 nonfarm payroll jobs in September, trailing the 84,000 consensus estimate from economists polled by Dow Jones. HPE shares jumped 7.8% in the afternoon session and are up 189% since the beginning of the year, reaching a new 52-week high of $69.77 per share.

Celestica Inc. reported second-quarter revenue growth of 62% year over year and an 83% rise in adjusted EPS, then raised its 2026 outlook and said revenue growth should accelerate again in 2027. The company expects its 1.6T networking programs to ramp significantly in 2027, is preparing to deliver custom racks for OpenAI, and expects its AMD Helios opportunity to ramp in the first half of next year, with management describing both as multibillion-dollar opportunities. Celestica trades at about 18.5 times forward earnings while consensus calls for roughly 75% EPS growth next year, though three customers accounted for 32%, 17% and 14% of Q2 revenue and roughly $1 billion of capital expenditures is planned for 2026. Hedge fund interest weakened slightly in the second quarter, with the number of funds holding the stock falling from 67 in Q1 to 63 in Q2 while the total value of their positions rose from approximately $4.38 billion to $4.84 billion. Management says customers are already discussing requirements for 2027, 2028 and even 2029, making the upcoming October 27 investor day particularly important.