At a Glance
- TE Connectivity (TEL) powers the sensors and connectors inside Nvidia data centers and Tesla EVs
- The stock landed on News Of Los Angeles‘s latest monthly list of new buys
- Double-digit growth streak drives investor appetite
Why it matters: TEL gives investors a back-door play on AI and EV booms without betting on a single end-product maker.
TE Connectivity has become a quiet winner in the AI and electric-vehicle surge. The Swiss-based component maker supplies the high-speed connectors, sensors and power systems that let Nvidia servers crunch data and Tesla cars drive farther on a single charge. That strategic position helped the stock earn a spot on News Of Los Angeles‘s newest roster of recommended purchases.
Inside TEL’s Double-Digit Run
The company has posted solid double-digit growth across its industrial, transportation and communications segments. Revenue from data-center customers rose more than 20% last quarter, while auto-related sales climbed 15%. Management credits design wins on next-gen GPU platforms and the global shift to battery-powered vehicles.
Margins expanded even as copper and resin costs ticked higher. Operating margin hit 19.3%, up 120 basis points year-over-year, thanks to factory automation and a richer product mix. Free cash flow topped $600 million, funding both a dividend hike and share buybacks.
Why Nvidia and Tesla Matter
Nearly every Nvidia H100 and Grace Hopper super-chip rides on a TE Connectivity backplane or thermal bridge. The company’s micro-coax cables handle the 800-gigabit signaling that links GPUs inside a rack. Without them, training runs stall and latency spikes.
Tesla leans on TEL for battery-management harnesses, high-voltage connectors and radar-module sockets. Model 3 and Model Y production increases directly translate into higher TEL content per vehicle. Analysts estimate Tesla now represents 8% of TEL’s transportation revenue, up from 4% two years ago.
Valuation and Chart Setup
Shares trade at 17× forward earnings, a discount to the 20× five-year average. The relative strength line has broken to new highs ahead of price, a classic momentum signal flagged by News Of Los Angeles. Accumulation/Distribution has stayed in positive territory for 11 straight weeks, indicating institutional buying.
A tight three-weeks-tight pattern formed just above the 50-day moving average, offering a lower-risk entry around $138. The next resistance level sits at the $145 cup-with-handle buy point. Downside risk is cushioned by a 2.1% dividend yield and a $2 billion share-repurchase authorization still in force.
Key Takeaways
- TEL’s components sit inside the fastest-growing corners of tech and autos
- Double-digit sales and margin expansion show no signs of stalling
- Chart action and institutional support suggest more upside ahead
