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Home / Themes / Connectivity '24: Cables & Connectors

Theme thesis · 4/5 sections · Tickers 3 with notes · 1 pending

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Bull / Bear Details has the investment thesis and bull/bear points. Overview is monitoring guidance (hiring, forums, second-order trends, search keywords, Google Trends, datasets).

Bull / Bear Details

The current thesis for Connectivity '24: Cables & Connectors, which includes NEX FP and PRY IM, is bullish. The market is poised to benefit from a cyclical reco

Thesis

The current thesis for Connectivity '24: Cables & Connectors, which includes NEX FP and PRY IM, is bullish. The market is poised to benefit from a cyclical recovery in telecom capital expenditures, driven by the increasing demand for high-speed internet and the expansion of fiber optic networks. The ongoing deployment of AI-driven technologies and the global push for broadband access, supported by government initiatives like BEAD, are expected to drive significant growth in the demand for cable and connector solutions.

Bull case

The BEAD program's funding is set to boost infrastructure projects, increasing demand for fiber optic cables.
Rising AI and data center investments are driving the need for high-capacity, reliable connectivity solutions, benefiting cable and connector suppliers.
Companies like Nexans and Prysmian are well-positioned to capitalize on the global trend towards fiber optic network expansion.

Bear case

Potential regulatory challenges and supply chain disruptions could slow down the deployment of new projects.
Competition from alternative technologies, such as satellite broadband, might impact demand for traditional cable solutions.
Economic uncertainties and fluctuating raw material prices could affect profit margins for cable manufacturers.

Overview

Hiring Trend Watchpoints

High-performing operators in the Connectivity '24 theme are expected to show robust hiring in specialized technical roles, particularly those related to AI infrastructure, fiber optics, and power solutions. We should anticipate an increase in job postings for 'High-Speed Design Engineer', 'Optical Network Engineer', 'Data Center Solutions Architect', 'Power Electronics Engineer', and 'Automation Specialist' roles. Companies like Amphenol (APH) and TE Connectivity (TEL) are likely to prioritize talent with expertise in advanced interconnects, liquid cooling solutions, and fiber-attached connectivity, reflecting the densification and increasing power demands of AI. Prysmian (PRYMY) will likely focus on roles related to high-voltage cable systems, submarine cable installation, and digital solutions for data centers. Geographically, hiring will concentrate around major data center hubs, renewable energy project sites, and regions with significant broadband infrastructure initiatives (e.g., US, Europe, Asia-Pacific). A strengthening theme would be confirmed by sustained growth in these specialized technical postings, particularly for R&D and engineering roles, and explicit mentions of hiring expansions in earnings calls. Conversely, a weakening or inflecting theme would be indicated by a slowdown or freeze in these key technical areas, a shift towards more generalist roles, or a significant increase in automation-related job cuts without corresponding new high-skill roles, suggesting a substitution rather than augmentation of the workforce.

Forum Watchlist

subreddit — r/datahoarderhigh
Discussions on data center build-outs, storage infrastructure, and high-speed networking components, including user experiences with specific cable and connector brands.
subreddit — r/networkinghigh
Trends in network architecture, fiber vs. copper debates, new connector standards, and equipment reliability, often mentioning specific vendors.
forum — Broadband Forummedium
Industry discussions and standards development for broadband access, fiber deployment, and related infrastructure, providing insights into future demand drivers.
community — ServeTheHome (STH) Forumsmedium
Deep dives into server hardware, data center components, and high-performance computing, including detailed reviews and discussions on interconnects and power delivery.
niche_channel — Lightwave Online Communityhigh
Specialized discussions on optical networking, fiber optic technology advancements, and market trends, directly relevant to fiber cable and connector demand.

Industry Publications

Lightwave (lightwaveonline.com) — Leading source for optical communications news, analysis, and technology trends, directly covering fiber optic cables and components.
Cabling Installation & Maintenance (cablinginstall.com) — Covers structured cabling, data center infrastructure, and enterprise network connectivity solutions.
Fierce Telecom (fiercetelecom.com) — Provides news and analysis on the telecom industry, including broadband deployment, 5G infrastructure, and network upgrades.
Data Center Dynamics (datacenterdynamics.com) — Focuses on data center design, construction, and operations, including power, cooling, and connectivity infrastructure.
Wire & Cable Technology International (wiretech.com) — Global magazine for the wire and cable manufacturing industry, covering production, materials, and market trends.
EE Times (eetimes.com) — Covers electronics engineering, including interconnects, sensors, and power management, relevant for component suppliers.
Power Grid International (power-grid.com) — Focuses on electricity transmission and distribution, smart grids, and utility infrastructure, relevant for energy cable demand.

Second Order Trends

Several second-order trends are emerging within the Connectivity '24 theme. Firstly, the **'Copper and Optical Agnosticism'** strategy is gaining traction, with companies like Amphenol (APH) and TE Connectivity (TEL) actively expanding their capabilities in both copper and fiber solutions. This reflects a market where customers demand flexibility and optimized solutions for diverse applications, rather than a single dominant technology. Amphenol's acquisition of CommScope (CCS) and TE Connectivity's RAM Photonics acquisition are clear examples of this. Secondly, there's a significant focus on **'Power Connectivity for AI'**, moving beyond just data transmission. The immense power requirements of AI data centers are driving demand for specialized power cables, connectors, and power distribution units. TE Connectivity's Astrodyne TDI acquisition and Prysmian's targeting of EUR 2 billion in data center-related revenues with 'very accretive' margins highlight this. Thirdly, **'Vertical Integration and Value-Added Solutions'** are becoming more critical. Companies are not just selling components but offering integrated systems and services, such as Prysmian's expansion into long-distance submarine telecom through Xtera, or Amphenol's move into high-reliability value-add assemblies via Trexon. Finally, **'Sustainability in Infrastructure'** is an an increasingly prominent narrative, with companies like Prysmian setting ambitious targets for sustainability-linked revenues and net-zero commitments, indicating a growing emphasis on environmentally conscious manufacturing and deployment practices in the broader industry. The shift of AI from data centers to the 'edge' is also an emerging theme, potentially creating a 'step function' in demand for connectivity in autonomous vehicles, robotics, and mobile devices.

Search Keywords Brand Product

fiber optic cables
high-speed connectors
data center interconnects
submarine power cables
telecom cables
energy cables
optical fiber
power distribution units
liquid cooling interconnects
high-reliability assemblies

Search Keywords Policy Regulatory

BEAD program funding
broadband infrastructure bill
US tariffs aluminum wire
EU digital infrastructure policy

Search Keywords Event Phrases

FTTH Conference
OFC Conference
Data Center World
DistribuTECH International

Google Trend Product Category Intent

• fiber optic internet • data center cables • high speed ethernet cable • home fiber installation • AI server rack connectivity

Google Trend Consumer Intent

• best internet provider • how to get fiber internet • smart home wiring • electric vehicle charging infrastructure

Google Trend Macro Policy Terms

• broadband access grants • renewable energy grid upgrades

Top datasets to track

1. Fiber Optic Cable Shipment Volume (Global) Type: industry_report · Provider: CRU Group, Dell'Oro Group, LightCounting Cadence: Quarterly Why it matters: Directly indicates demand and expansion rate of fiber optic networks, a core driver for the theme. Sustained growth signals theme strengthening. Suggested query: global fiber optic cable shipment volume report Confidence: high

2. BEAD Program Funding Allocations & Project Starts Type: government_data · Provider: NTIA Reports, State Broadband Offices Cadence: Annually/Quarterly Why it matters: Signals government support and focus on broadband infrastructure, a key bull driver. Tracking actual project starts confirms deployment. Suggested query: BEAD program funding allocations NTIA Confidence: high

3. AI & Data Center Capital Expenditure (Global) Type: industry_report · Provider: Gartner, IDC, Hyperscaler Earnings Reports Cadence: Quarterly Why it matters: Reflects demand for high-capacity networks and advanced interconnects, a primary growth engine for theme members. Increasing capex signals theme strengthening. Suggested query: AI data center capex forecast Confidence: high

4. Copper & Aluminum Commodity Prices Type: economic_data · Provider: London Metal Exchange (LME), World Bank Cadence: Daily/Weekly Why it matters: Raw material prices directly impact profit margins for cable manufacturers (e.g., Prysmian). Fluctuations can signal margin pressure or tailwinds. Suggested query: LME copper price, LME aluminum price Confidence: high

5. Global Electricity Transmission & Distribution Investment Type: industry_report · Provider: IEA, BloombergNEF Cadence: Annually Why it matters: Indicates investment in energy grids and renewable energy integration, a significant driver for power cable demand (e.g., Prysmian's Power Grid segment). Suggested query: global power grid investment report Confidence: medium

Key Metrics3 rows

Metric	Cadence	What It Signals	Update Source
Fiber Optic Cable Shipment Volume	Quarterly	Indicates demand and expansion rate	Google_Sheets
BEAD Program Funding Allocations	Annually	Signals government support and focus	Google_Sheets
AI & Data Center Investment Levels	Quarterly	Reflects demand for high-capacity networks	Google_Sheets

Upcoming Catalysts5 rows

Catalyst ID	Estimated Timing	Estimated Date Start	Estimated Date End	Catalyst	Why It Matters	Ticker Or Theme Specific	Transcript Date	Source Type	Catalyst Source
APH_3a22ab61	For the third quarter	2026-07-01	2026-09-30	Amphenol expects Q3 2026 sales in the range of $9.3 billion to $9.4 billion and adjusted diluted EPS of $1.40 to $1.42.	This provides specific short-term financial targets, indicating continued strong growth and profitability, which can influence near-term stock performance and investor sentiment.	Ticker	2026-07-29	earnings_transcript	APH (ticker)
APH_476914e4	in the third quarter	2026-07-01	2026-09-30	IT datacom sales are expected to see a further sequential increase in the mid-teens in Q3 2026, driven by accelerating AI data center investments and expanding demand from enterprise and cloud customers.	This highlights the continued strong momentum in the critical AI-driven IT datacom market, which is a primary growth driver for Amphenol and reinforces the bullish thesis on AI infrastructure.	Ticker	2026-07-29	earnings_transcript	APH (ticker)
APH_080afab4	into the third quarter	2026-07-01	2026-09-30	Defense market sales are expected to increase in the low double-digit range in Q3 2026 from Q2 levels.	This indicates continued robust growth in the defense segment, benefiting from increased global investments in defense technologies and Amphenol's strong market position.	Ticker	2026-07-29	earnings_transcript	APH (ticker)
TEL_fd3924ab	fourth quarter	2026-07-01	2026-09-30	Reporting of approximately $3.05 adjusted EPS for fiscal Q4 2026.	This demonstrates continued profitability and operational efficiency, contributing to the overall strong fiscal year performance.	Ticker	2026-07-22	earnings_transcript	TEL (ticker)
TEL_555b7111	by the end of this calendar year	2026-10-01	2026-12-31	Completion of the acquisition of Astrodyne TDI.	This bolt-on acquisition broadens TE Connectivity's portfolio of power and filter products, is expected to be accretive to growth rates and margins for both TE and the Industrial segment, and expands TAM in custom power solutions for semiconductor equipment, defense, and medical markets.	Ticker	2026-07-22	earnings_transcript	TEL (ticker)

Constituents

APHT2
— Amphenol Corporation
PRYMYT3
— Prysmian S.p.A.
TELT3
— TE Connectivity plc
NEX.PAT3
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Connectivity '24: Cables & Connectors (view performance)