Amphenol or Teradyne: Which AI Semiconductor Stock Is the Better Buy Right Now?

Amphenol and Teradyne: Key Players in the AI Semiconductor Landscape

Amphenol (APH) specializes in creating electronic connectors, sensors, and interconnect systems that are integral to data centers, telecommunications, automotive, and industrial sectors. Teradyne (TER), on the other hand, is renowned for its semiconductor testing equipment and automation solutions, which are vital for verifying advanced chip functionality.

Both companies are foundational to the semiconductor industry, especially as artificial intelligence infrastructure expands. Amphenol is a major supplier for the growing data center market, while Teradyne is seeing increased demand for its testing solutions as AI processors and GPUs become more sophisticated.

With the rapid evolution of AI technology and more complex chip designs, both Amphenol and Teradyne are well-positioned to benefit from ongoing investments in semiconductors. Evaluating these companies now can help investors determine which is better poised to capitalize on the AI-driven market surge.

A closer look at their growth trajectories, financial resilience, profitability, and valuation will clarify which stock presents the most attractive opportunity.

Why Consider Amphenol (APH)?

Amphenol has solidified its leadership in the AI semiconductor supply chain, excelling in high-speed copper, power, and expanding fiber interconnect solutions. In the fourth quarter of 2025, Amphenol achieved record sales of $6.44 billion—a 49% year-over-year increase. The IT datacom segment, which now accounts for 38% of total revenue, grew organically by 110%, reflecting strong demand from AI-focused data centers. This surge highlights Amphenol’s growing influence in supporting advanced GPU, server, and rack infrastructure for AI applications.

The company’s acquisition of CommScope’s CCS business in January 2026 significantly broadened its fiber optic offerings and reinforced its high-speed copper capabilities, positioning Amphenol as a comprehensive provider for AI clusters and large-scale data centers. This deal is projected to add around $4.1 billion in revenue for 2026 and is expected to boost earnings. Additionally, acquiring Trexon has strengthened Amphenol’s presence in high-reliability defense interconnects, further diversifying its market reach and enhancing its competitive edge.

Despite these strengths, Amphenol faces challenges such as integration risks from recent acquisitions, increased leverage, tax uncertainties in China, and cyclical slowdowns in certain markets. Nevertheless, its broad market exposure, automation expertise, and robust AI-related order backlog provide a solid foundation for long-term growth in the semiconductor infrastructure sector.

Current analyst estimates from Zacks project first-quarter 2026 earnings at $0.94 per share, up 9.3% over the past month, though this marks a 49.21% decrease compared to the previous year’s quarter.

Source: Zacks Investment Research

Why Consider Teradyne (TER)?

Teradyne is strengthening its position as a pivotal supplier in the AI semiconductor market, benefiting directly from increased investments in AI-driven data centers. In the fourth quarter of 2025, Teradyne’s revenue jumped 44% year-over-year to $1.08 billion, with $883 million coming from Semiconductor Test sales. This growth was fueled by strong demand in AI computing, networking, and memory applications. Notably, AI-related customers accounted for over 60% of quarterly revenue and are expected to reach nearly 70% in the first quarter of 2026, underscoring Teradyne’s deepening involvement in next-generation AI infrastructure.

The company’s momentum is especially strong in System-on-Chip (SoC) and memory testing, where AI demand is reshaping its revenue mix. SoC test revenues saw significant growth in 2025, driven by expanding networking and high-performance computing applications, while memory testing benefited from gains in HBM and DRAM segments linked to AI acceleration. Teradyne’s portfolio is increasingly focused on compute-centric opportunities as AI workloads scale. The company has also partnered with MultiLane to advance high-speed interconnect testing, expanding its capabilities from wafer-level to full rack-scale system validation.

Financially, Teradyne generated $450 million in free cash flow and ended the quarter with $448 million in cash and marketable securities, highlighting its strong liquidity and financial stability. The company aims to outpace the broader market, targeting $6 billion in revenue within an addressable market of $12–14 billion for automated test equipment, indicating significant potential for above-market growth.

Zacks’ consensus estimate for Teradyne’s first-quarter 2026 earnings stands at $1.94 per share, a 57.7% upward revision in the past month and a remarkable 158.7% increase year over year.

Source: Zacks Investment Research

Comparing Stock Performance and Valuation: APH vs. TER

In the past six months, Teradyne’s stock has soared by 177.4%, far outpacing Amphenol’s 37.8% gain. Teradyne’s impressive rally is driven by surging demand for its AI chip testing equipment, where it holds a leading position in validating advanced semiconductors for AI, cloud, and networking applications.

Stock Performance: APH vs. TER

Source: Zacks Investment Research

Both companies are trading at premium valuations, with Amphenol and Teradyne receiving Value Scores of D and F, respectively. On a forward 12-month Price/Sales basis, Amphenol’s multiple is 5.86x, while Teradyne’s is higher at 12.27x, indicating that investors are assigning a greater growth premium to Teradyne.

Valuation Comparison: APH vs. TER

Source: Zacks Investment Research

Why Teradyne Currently Outshines Amphenol

Although both Amphenol and Teradyne are well-positioned to benefit from AI infrastructure expansion, Teradyne stands out with stronger short-term earnings growth, a higher proportion of AI-related revenue, more frequent upward estimate revisions, and superior stock performance. Despite its higher valuation, Teradyne’s direct exposure to the increasing complexity and testing needs of AI chips makes it the more attractive option at this time.

Currently, Teradyne holds a Zacks Rank #1 (Strong Buy), while Amphenol is rated Zacks Rank #2 (Buy), making TER the more compelling choice for investors seeking exposure to the AI semiconductor boom. See the full list of today’s Zacks #1 Rank stocks here.

Zacks’ Top Semiconductor Stock Pick

There’s a lesser-known company in the semiconductor space that produces products not offered by industry giants like NVIDIA. Positioned to benefit from the next wave of market growth, this company is just starting to gain attention—making now an ideal time for investors to take notice.

With robust earnings growth and a rapidly expanding customer base, this firm is set to capitalize on the surging demand for Artificial Intelligence, Machine Learning, and the Internet of Things. Global semiconductor manufacturing is forecasted to grow from $452 billion in 2021 to $971 billion by 2028.

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This article was originally published by Zacks Investment Research.

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