TE Connectivity (TEL) sees its revenue expansion this year extending well beyond artificial-intelligence demand, CEO Terrence Curtin said Thursday at the Jefferies Global Industrials Conference in New York.
The company projects total growth of about $2.5 billion in 2026, with AI contributing roughly $1 billion — or 40% — of the increase. AI order growth has moderated to about 33% year over year from a prior pace of 70%, Curtin said, reflecting program timing and capacity ramp issues. Demand tailwinds from AI infrastructure are still expected to support growth through 2027.
Data-center networking revenue stands at approximately $3 billion within TE Connectivity's roughly $20 billion total, CEO Terrence Curtin disclosed. Power connectivity has grown to represent about one-third of the data-center and data-networking segment, up from 25% three years ago. Customers are testing 800-volt and 400-volt power architectures, which can lift content per rack by as much as 50% in certain designs, Curtin said.
On the copper versus optics debate, Curtin pushed back against framing the two as substitutes. "We've always seen our customers obviously look at where optics play from a cost, from a power need, and really to get to the data speeds that is needed in AI," he said. "It's not a new discussion, but it also sort of became a little bit of a versus discussion versus an and discussion."
In automotive, content is expected to grow 4% to 6% above a global vehicle production outlook that is flat to down 1%. Roughly 40% of automotive content gains come from data connectivity, 30% from EV content in Asia, and 30% from vehicle features and edge-compute applications. The commercial-vehicle business is balanced globally, with about one-third each of exposure to Asia, Europe, and North America; approximately one-third of Asian commercial vehicles now use electrified powertrains.
Industrial automation in the ACL segment posted eight consecutive months of PMI expansion, with content gains running 200 to 300 basis points ahead of industrial capital spending. TE Connectivity completed its acquisition of RAM Photonics earlier this year, adding fiber-array-unit technology and manufacturing automation capabilities, though the business does not yet contribute revenue. Meaningful revenue from the optical-space segment is expected around 2028 or 2029.
The energy segment, 70% focused on North America, is guiding to mid-teens organic growth in a market expanding 6% to 7%, up from historical growth of 1% to 2%. Both the transportation and industrial segments are reporting operating income margins around 22%, with a target of 30% incremental margins.
Aerospace and defense is also set for double-digit growth, Curtin said.
TE Connectivity shares traded at $204.65 on Thursday, within a 52-week range of $190.27 to $252.56. The company's P/E ratio stood at 19.95 with a PEG ratio of 0.18, and return on equity was 24%.
