This week’s AI Insights recommendation is lesser-known cable manufacturer Amphenol (NYSE: APH).
You’ll be forgiven if you’ve never heard of the 93-year-old company that makes a wide variety of electronic connectors, including fiber optic and coaxial.
It’s certainly a sharp contrast from the previous AI Insights pick, tech titan Google, but there are a few factors that seem to have piqued ChatGPT’s interest in APH.
If you’re new here, the AI Insights feature is based on a simple concept: We ask ChatGPT for a single stock recommendation every week. We add $100 of the stock to the portfolio and continue to monitor it for several months.
Let’s dig into Amphenol.
ChatGPT Stock Pick of the Week: Alphenol
This time around, ChatGPT initially tried to suggest three different companies but finally settled on a single pick after an additional prompt:
A focused stock idea for today is Amphenol Corporation (ticker: APH), supported by fresh “Strong Buy” ratings and rising earnings estimates. Amphenol can be attractive because it combines strong growth with a durable, diversified business in critical electronic components.
Amphenol (APH) at a Glance
| Company | Amphenol Corporation |
| Ticker (Exchange) | APH (NYSE) |
| Founded | 1932 (as American Phenolic Corporation) |
| Headquarters | Wallingford, Connecticut, USA |
| CEO | R. Adam Norwitt |
| Core business | Design and manufacture of electronic and fiber‑optic connectors, interconnect systems, and coaxial and specialty cables for communications, industrial, automotive, and aerospace/defense markets |
| Market cap | $154 billion |
| Employees | 125,000 (2024) |
| Price-to-earnings ratio (P/E) | 42 |
Our Take
As we mentioned above, we haven’t done a lot of reporting on Amphenol so we got senior news writer Dave Kovaleski to offer a few thoughts:
Amphenol is one of the world’s largest providers of interconnection, sensor and antenna solutions that “enable the electronics revolution.” In simple terms, it makes the plugs, sockets and cables that connect machines, the sensors that help machines detect things, and the antennas that send and receive signals. Amphenol serves a variety of industries, including automotive, broadband, commercial aerospace, defense, industrial, information technology, data communications, mobile devices and mobile networks.
Amphenol is not a stock that’s been on our radar much at all, but it has been a solid performer over the years and warrants attention. The stock is up 86% year-to-date and 129% over the past 12 months. It has a three-year annualized return of 49.2% and a five year annualized return of 31.3% as of December 18. Over the past 10 years it has averaged a return of roughly 25.6% per year. That would stack up well against any other stock over that stretch.
The stock is trading at 42 times earnings and 30 times forward earnings, but its five-year PEG ratio is just 1.09, suggesting it’s not overvalued relative to its long-term earnings outlook.
This is definitely a stock we will track closely over the next few months.
What Other Experts Are Saying About Amphenol
Amphenol doesn’t have nearly the name recognition as some of the stocks in our portfolio, but it does have some ardent supporters. It’s rated as a strong buy by the 10 analysts who follow it, with eight recommending a buy and two opting for a hold.
It has a 12-month average price forecast of $148.30, which represents a 14.63% upside.
Amphenol released an exceptional third-quarter earnings report earlier this month, with revenues of $6.19 billion, up a staggering 54% year-over-year. It’s easy to see why many analysts are suddenly interested in Amphenol.
On the other hand, critics believe that all the good news surrounding the company has been priced in, and the upside from this point is limited. It’s something to consider as the company currently trades at a relatively high price-to-earnings ratio of 42.
How Did Last Week’s Pick Perform?
It hasn’t been the best start for Google in the portfolio. Note: We were off last week, so this is two weeks instead of one.
Adding Alphabet (NASDAQ: GOOG) to the AI Insights portfolio seemed like one of the most no-brainer decisions ever, but it hasn’t been the best couple of weeks for the tech giant’s stock.
The entire market has been hit hard over the last few weeks, but we might have bought Google at its peak (at least in the short term).
Google has been riding some seriously good vibes over the six months, as it appears to have closed the gap on OpenAI in its AI pursuits, and it’s even developing chips that might rival Nvidia for specific applications.
One factor that may be driving the price of Google down this week is a report that a massive Michigan data centre is having issues with financing. The news has affected several tech giants, including Oracle, Nvidia, and Broadcom.
While it may be a poor start for Google in the portfolio, this pick still appears very promising in the long run, as there are simply too many positives for the company.
Construction material giant Commercial Metal Company (CMC) was certainly a different choice for the AI Insights portfolio, but the early returns are good.
As for the overall portfolio, it has been a turbulent period for stocks, with several big-name companies experiencing double-digit declines over the last couple of weeks.
The tech companies in the AI Insights portfolio have been hit particularly hard, as Google and Nvidia have seen significant declines since being added to the portfolio.
Interestingly, the AI Insights portfolio remains in the green, thanks to strong performances from Commercial Metal Company (+9.58%), Progyny (+7.98%), and Micron Technology (+17.50%), which is more than can be said for our control portfolio.
AI Insights Portfolio Week #8
- Total invested: $800
- Current Market Value: $821.63
- Total Unrealized Gains: 2.70%
| Stock | Shares | Day Gain | Total Gains | Market Value |
| Alphabet (Google) | .312 | -3.14% | -7.04% | $92.99 |
| Commercial Metal Company (CMC) | 1.56 | -1.44% | +9.58% | $109.55 |
| Nvidia (NVDA) | 0.536 | -3.81% | -8.35 | $91.61 |
| Progyny (PGNY | 4.15 | -0.08% | +7.98% | $107.86 |
| Seagate (STX) | 0.363 | -3.64% | +.68% | $100.79 |
| Comcast (CMCSA) | 3.5 | +1.98% | -6.27% | $106.12 |
| NetApp (NTAP) | 0.86 | -1.88% | -4.97% | $95.43 |
| Micron Technology (MU) | .52 | -3.01% | +17.50 | $117.27 |
In an interesting turn of events, the control portfolio, which is composed entirely of Vanguard Total Stock Market ETF (VTI), actually dipped into the negative territory this week.
The two portfolios have been pretty much neck and neck throughout this experiment but the last week was particularly rough for the VTI portfolio and it’s now in the red.
It’s still a relatively small amount, and theoretically the AI Insights portfolio should be more volatile so we’ll see where this goes in the coming weeks.
Standard Portfolio (100% VTI) Week #7
- Total invested: $800
- Current Market Value: $797.01
- Gains: -0.37%
| Stock | Shares | Day Gain | Total Gains | Market Value |
| Vanguard Total Stock Index (VTI) | 2.113 | -1.09% | -0.37% | $797.01 |
Methodology
Every week, we ask ChatGPT for a simple stock recommendation after the market closes on Wednesday. Then, we invest $100 in the stock and $100 in a control portfolio consisting of 100% VTI. The idea is to gain a sense of how following ChatGPT’s advice compares to a passive investment strategy.
You can read more about the parameters for the experiment at the bottom of the first AI Insights article.
Disclaimer: Neither large language models nor ValueWalk suggest using this as an actual investment strategy. This article is for educational purposes only.
