Amphenol AI opportunity at risk, BofA says, downgrades to neutral

Amphenol’s (NYSE:APH) shares slipped 3.7% in premarket trading on Wednesday as BofA downgraded the electronics equipment maker to neutral from buy, arguing that the company’s total addressable market could be affected by potential design changes to Nvidia’s (NASDAQ:NVDA) GB200 platform.

According to BofA, while Nvidia’s design changes, primarily to address some of the system overheating issues, “remain fluid,” there could be significant impact on Amphenol’s (APH) content in GB200 NVL36 and NVL72-based configurations.

“One possible solution is to lower the performance (and thus lower the heat generated), and in such a case the flyover cables (produced by Amphenol) could be replaced by a printed circuit board, the brokerage further noted.

And this would in turn “lower the TAM opportunity for APH and make it harder to achieve EPS targets in 2025/2026 based on higher content expectations.”

BofA estimates factor in about $1B of incremental revenue opportunity from Nvidia’s (NVDA) in FY25, which would equate to $0.21 per share in earnings.

The investment bank also lowered its PT to $71 vs $80, which implies a 15% increase from Tuesday’s close. The stock has 9 strong buys, 4 buys, 5 holds and 1 sell among Wall Street analysts tracked by Seeking Alpha.