Key Highlights

● TE Connectivity guided for double-digit sales growth in fiscal 2027.

● AI-linked orders climbed sharply during the quarter.

● Shares fell anyway, unlike rival Amphenol.

● The stock makes connectors for autos, factories and data centers.

TE Connectivity reported a strong fiscal fourth quarter, surging AI-linked orders and guidance for double-digit sales growth, but its shares still edged lower.

TE Connectivity (NYSE:TEL) edged lower on Wednesday, October 28, slipping on the S&P 500 even after the connector and sensor maker delivered a strong fiscal fourth quarter and guided for double-digit sales growth in fiscal 2027.

Strong Numbers, Soft Reaction

TE Connectivity makes connectors, sensors and cable assemblies used in cars, factory equipment, aircraft and, increasingly, data centers. High-speed connectivity inside AI servers and networking gear has become a growing business as hyperscalers race to build out computing capacity.

The fiscal fourth-quarter results were described as strong, and guidance for double-digit sales growth in the new fiscal year pointed to continued momentum. Even so, the shares slipped, with no specific negative catalyst identified in reports of the session. Investors appeared to focus on whether results were strong enough relative to elevated expectations.

Peers Moved Higher

TE's dip contrasted with gains at close competitor Amphenol (NYSE:APH), which rose after reporting record orders and strong organic growth, citing continued exceptional organic growth in the IT datacom market. Flex (NASDAQ:FLEX) also rallied after raising its revenue forecast on AI hardware demand, and Vertiv (NYSE:VRT) soared after lifting its guidance.

That divergence suggested investors were rewarding the most dramatic beats and raises while treating solid-but-expected results with more caution. TE was one of several S&P 500 members to fall despite upbeat reports, alongside GE Vernova (NYSE:GEV), ADP (NASDAQ:ADP) and Garmin (NYSE:GRMN).

Chips Rally as Fed Holds

The broader market rose modestly. The Federal Reserve left its benchmark rate range unchanged in a 10-2 vote. The S&P 500 rose 21.38 points to 7,743.98, its third straight gain, and the Philadelphia Semiconductor Index climbed for a fourth straight session to 11,684.00, powered by memory makers after SK hynix (NASDAQ:SKHY) reported blockbuster results.

Breadth was narrow, however, with the equal-weight S&P 500 slipping slightly. Long-dated Treasury yields climbed, with the 10-year pushing past a key psychological threshold.

What to Watch

For TE Connectivity, the focus will be on whether AI-related orders continue to accelerate and how the company balances that strength against its large automotive and industrial businesses, which are more exposed to the economic cycle.

Big-tech spending plans remain crucial for AI hardware suppliers. Microsoft and Alphabet reported after Wednesday's close, with Alphabet raising its capital spending forecast, and Amazon (NASDAQ:AMZN) reports after Thursday's close.