Baron Fifth Avenue Growth Fund on Amphenol Corporation
Thesis
The Fund continued building its Amphenol position because it believes the market underestimates the company's ability to innovate and adapt as data-center architectures evolve. Investor debate around copper versus optical connectivity has created significant share-price volatility, but the underlying business remains strong. First-quarter organic growth reached 33% year over year and orders reached a record $9.4 billion. With book-to-bill well above one, the Fund believes Amphenol has a clear growth trajectory ahead.
“We continue to believe the market underestimates Amphenol's long-standing ability to innovate and adapt”
Key risks
- A faster-than-expected shift from copper toward optical architectures could affect demand for portions of Amphenol's portfolio.
- Changing investor expectations around connectivity architecture can create substantial stock-price volatility.