Amphenol Corp - Class A

Amphenol is mentioned as part of the portfolio's exposure to electrical connectors and sensors, which are expected to benefit from the growth in electric vehicle (EV) penetration. The manager notes that 'all of these names enjoy a content-per-vehicle uplift when selling onto an electric vehicle compared to internal combustion engine vehicles and are expected to experience tailwinds to growth as EVs continue to penetrate into the sales mix.'

We sold the majority of our Amphenol position during the first half – earlier than we had envisaged when we initiated the position in early 2024. We did not foresee the magnitude of the AI- and data-center-driven demand boom from which the company has since benefited. When we initiated the position, IT datacom was one market among several; by 2025, it had become Amphenol’s largest, accounting for 36% of sales. At the same time, the order backlog had increased to approximately USD 8.9 billion, from USD 6.1 billion the year before, driven by AI-related demand. In Q1 2026, Amphenol reported revenue growth of 58%, of which 33% was organic, led by exceptional demand in the IT datacom business. However, increasing thematic concentration toward AI, combined with an increasingly demanding valuation, made the stock a less natural fit within our portfolio framework.

Amphenol Corporation (APH) delivered a strong first quarter, reporting a book-to-bill ratio of 1.24x, driven by a 78% year-over-year increase in orders. Management characterized demand as broad-based across both end markets and geographies. Concerns about a transition from copper-based interconnects to optical solutions were deemed misplaced, as a meaningful transition is unlikely to occur before the end of the decade. Amphenol's shares recovered during the quarter as investors gained confidence that demand for copper interconnect solutions will remain durable for years to come. We continue to view Amphenol as a differentiated, high-quality asset that should be well positioned to gain share in the global connector market.

Amphenol is one of the world's largest manufacturers of connectors, sensors, and interconnect systems, producing the nervous system for modern electronics. The company is experiencing a supercharged growth cycle driven by the infrastructure buildout in AI, as high-speed AI servers require significantly more connector content than traditional servers. Amphenol's production of mission-critical components, which represent a small percentage of a customer's total cost, creates high switching costs for OEMs, ensuring customer loyalty. The company's diversified end markets and decentralized structure allow for rapid responses to customer needs, further solidifying its competitive position.

Amphenol is the leading global producer of interconnect devices and has been a clear beneficiary of the buildout in data centre infrastructure, which has grown to one-third of its revenue. In the March 2026 quarter, its data centre revenue grew 81% versus the prior year. The company captures a meaningful share of spending in AI data centres, which require more high-performance connectors and cables than conventional cloud infrastructure. Additionally, Amphenol's broad participation across the data centre value chain and its successful acquisition program provide several growth drivers beyond AI infrastructure.

Amphenol has been a clear beneficiary of the buildout in data centre infrastructure, which has grown to one-third of its revenue. However, there are concerns regarding the sustainability of this revenue, as the market is sensitive to any signs of slowing demand. The company has broad participation across the data centre value chain, which provides several growth drivers beyond AI infrastructure. Despite this, the manager has decided to reduce their position in Amphenol after strong share price performance narrowed its discount to valuation, indicating a cautious outlook on its future growth prospects.

Amphenol’s share price rebounded after debate around its position in future data centre architectures eased. This indicates a recovery in confidence regarding its role in the evolving tech landscape, particularly as demand for data center solutions grows. The company is well-positioned to benefit from the structural changes in the market, especially with the increasing focus on AI infrastructure and semiconductor needs. Our strategy emphasizes high-dividend-growth companies, and Amphenol fits this profile as it is linked to robust cash flows and future growth potential.

Amphenol has performed well due to substantial growth in their AI data centre offerings and order intake, supported by recovering automotive and industrial end markets. The company is positioned to benefit from the acceleration in global electrification activity and grid spending, which are expected to drive demand for its products. The manager highlights that Amphenol is among the top performers in the portfolio, reflecting its strong business model and market position in the context of increasing investments in infrastructure and technology.

Amphenol (APH) continues to produce tremendous growth as its various interconnect products are utilized in many areas within data centers. The AI data center build out is driving high revenue and backlog growth for Amphenol, positioning it well within the booming AI infrastructure market.

We initiated a position in Amphenol Corporation, a leading provider of high-technology interconnect, sensor, and antenna solutions. The company’s mission-critical products are used in electrical systems to move data and transmit signals. As the world electrifies and more systems move from analog to digital, Amphenol’s content opportunity grows. Recently, Amphenol’s growth algorithm has accelerated thanks to its IT Datacom segment, which has grown from less than $3 billion annual run rate to $10 billion run rate. We believe the market underestimates Amphenol’s ability to innovate and adapt both organically and through acquisitions, providing a long runway for growth.