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3 Electronics Components Stocks to Buy From a Prospering Industry
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The Zacks Electronics - Miscellaneous Components industry participants are benefiting from the ongoing automation drive and increased spending by manufacturers of semiconductors, automobiles, machinery and mobile phones. Industry participants like TE Connectivity (TEL - Free Report) , nVent Electric (NVT - Free Report) , and Fabrinet (FN - Free Report) are well-poised to benefit from the solid adoption of Artificial Intelligence (AI) and the democratization of IoT, which are transforming robotics, industrial automation, transportation systems, retail and healthcare. However, a challenging global macroeconomic environment, end-market volatility, and higher tariffs are headwinds. Export restrictions imposed by the United States, as well as China, are a major headwind. Growing geopolitical tensions and foreign currency headwinds are taking a toll on the industry players.
Industry Description
The Zacks Electronics - Miscellaneous Components industry primarily comprises companies providing various accessories and parts used in electronic products. The industry participants’ offerings include power control and sensor technologies to mitigate equipment damage, testing products for safety, and advanced medical solutions. They cater to varied end markets, such as telecommunications, automotive electronics, medical devices, industrial, transportation, energy harvesting, defense and aerospace electronic systems, and consumer electronics. Customers in this industry are mainly original equipment manufacturers, independent electronic component distributors and electronic manufacturing service providers.
3 Trends Shaping the Future of Electronics - Miscellaneous Components Industry
Automation Boom a Tailwind: The requirement for faster, more powerful and energy-efficient electronics leads to increased automation. Control systems, such as computers, and robots and information technologies for handling different processes and machinery, are driving the industry. The growing installation of collaborative robots, which add efficiency to production processes by working with production workers, will benefit industry participants. IoT-supported factory automation solutions are other contributing factors. The evolution of smart cars and autonomous vehicles is expected to drive growth for the industry.
Miniaturization Remains a Key Lever: The industry participants are benefiting from the ongoing transition in semiconductor manufacturing technology. Demand for advanced packaging, enabling the miniaturization of electronic products, remains strong. The consistent shift to smaller dimensions, the rapid adoption of device architectures like FinFET transistors and 3D-NAND, and the increasing utilization of new manufacturing materials to increase transistor and bit density are driving the demand for solutions provided by industry players.
Geopolitical Tensions Are Worrisome: The ongoing Russia-Ukraine war and the souring relationship between the United States and China are headwinds. Increasing dependency on AI-backed electronic devices on semiconductors and current restrictions ordered by the United States on trading with China, which remains the main hub for chip production, is a significant negative for the industry.
Zacks Industry Rank Indicates Bullish Prospects
The Zacks Electronics - Miscellaneous Components industry is housed within the broader Zacks Computer and Technology sector. It carries a Zacks Industry Rank #89, which places it in the top 36% of more than 250 Zacks industries.
The group’s Zacks Industry Rank, the average of the Zacks Rank of all the member stocks, indicates bullish near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than two to one.
The industry’s positioning in the top 50% of the Zacks-ranked industries is a result of the positive earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts are optimistic about this group’s earnings growth potential. Since March 31, 2025, the industry’s earnings estimates for the current year have moved 4.5% up.
Given the bullish prospects, there are a number of stocks that investors can choose to pick for a healthy portfolio. However, before we present the stocks, let us look at the industry’s recent stock-market performance and the valuation picture.
Industry Beats S&P 500, Meets Sector
The Zacks Electronics - Miscellaneous Components industry has outperformed the Zacks S&P 500 composite but was in line with the broader Zacks Computer and Technology sector in the past year.
The industry has appreciated 27.1% over this period compared with the S&P 500’s 19.1% growth.
One-Year Price Performance
Industry's Current Valuation
Based on the forward 12-month price to earnings (P/E), a commonly used multiple for valuing electronics – miscellaneous components stocks, the industry is currently trading at 22.69X compared with the S&P 500’s 21.86X and the sector’s 28.39X.
In the past five years, the industry has traded as high as 22.69X and as low as 17.04X, with a median of 18.74X, depicted in the charts below.
Forward 12-Month Price-to-Earnings (P/E) Ratio
3 Electronics - Miscellaneous Components Stocks to Buy
TE Connectivity: This Zacks Rank #1 (Strong Buy) stock is expected to benefit from strong demand for its solutions in the AI domain, as well as energy applications. You can see the complete list of today’s Zacks #1 Rank stocks here.
The company is benefiting from strength in Asia in the Transportation segment, where increased data connectivity trends and the ongoing growth of the electrified powertrain. TEL’s global manufacturing strategy with 70% localized production is helping the company expand margins and generate free cash flow. TE Connectivity expects the trend to continue in the near term, along with positive forex. The company expects fourth-quarter fiscal 2025 sales to increase 6% organically on a year-over-year basis to $4.55 billion.
TE Connectivity shares have appreciated 42.8% in the year-to-date period. The Zacks Consensus Estimate for the company’s fiscal 2025 earnings has increased 3.5% to $8.54 per share in the past 30 days.
Price and Consensus: TEL
nVent Electric: This Zacks Rank #1 company is benefiting from strong data center order growth. The Trachte and Electrical Products Group acquisitions are performing better than expected, further strengthening NVT’s position in the high-growth infrastructure vertical, including power utilities, data centers and renewables.
nVent Electric shares have appreciated 34.7% year to date. The Zacks Consensus Estimate for 2025 earnings has increased 6.1% to $3.28 per share in the past 30 days.
Price and Consensus: NVT
Fabrinet: This Zacks Rank #2 (Buy) company is expected to see near-term softness in the Datacom business. However, Fabrinet remains optimistic about a return to Datacom growth as demand for 1.6T devices increases over the long term. FN expects continued year-over-year growth in Non-Optical Communications in the fourth quarter of fiscal 2025.
Fabrinet shares have returned 58.4% in the year-to-date period. The Zacks Consensus Estimate for FN’s fiscal 2026 earnings has been revised upward by 3.4% to $10.16 per share over the past 30 days.
Price and Consensus: FN
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3 Electronics Components Stocks to Buy From a Prospering Industry
The Zacks Electronics - Miscellaneous Components industry participants are benefiting from the ongoing automation drive and increased spending by manufacturers of semiconductors, automobiles, machinery and mobile phones. Industry participants like TE Connectivity (TEL - Free Report) , nVent Electric (NVT - Free Report) , and Fabrinet (FN - Free Report) are well-poised to benefit from the solid adoption of Artificial Intelligence (AI) and the democratization of IoT, which are transforming robotics, industrial automation, transportation systems, retail and healthcare. However, a challenging global macroeconomic environment, end-market volatility, and higher tariffs are headwinds. Export restrictions imposed by the United States, as well as China, are a major headwind. Growing geopolitical tensions and foreign currency headwinds are taking a toll on the industry players.
Industry Description
The Zacks Electronics - Miscellaneous Components industry primarily comprises companies providing various accessories and parts used in electronic products. The industry participants’ offerings include power control and sensor technologies to mitigate equipment damage, testing products for safety, and advanced medical solutions. They cater to varied end markets, such as telecommunications, automotive electronics, medical devices, industrial, transportation, energy harvesting, defense and aerospace electronic systems, and consumer electronics. Customers in this industry are mainly original equipment manufacturers, independent electronic component distributors and electronic manufacturing service providers.
3 Trends Shaping the Future of Electronics - Miscellaneous Components Industry
Automation Boom a Tailwind: The requirement for faster, more powerful and energy-efficient electronics leads to increased automation. Control systems, such as computers, and robots and information technologies for handling different processes and machinery, are driving the industry. The growing installation of collaborative robots, which add efficiency to production processes by working with production workers, will benefit industry participants. IoT-supported factory automation solutions are other contributing factors. The evolution of smart cars and autonomous vehicles is expected to drive growth for the industry.
Miniaturization Remains a Key Lever: The industry participants are benefiting from the ongoing transition in semiconductor manufacturing technology. Demand for advanced packaging, enabling the miniaturization of electronic products, remains strong. The consistent shift to smaller dimensions, the rapid adoption of device architectures like FinFET transistors and 3D-NAND, and the increasing utilization of new manufacturing materials to increase transistor and bit density are driving the demand for solutions provided by industry players.
Geopolitical Tensions Are Worrisome: The ongoing Russia-Ukraine war and the souring relationship between the United States and China are headwinds. Increasing dependency on AI-backed electronic devices on semiconductors and current restrictions ordered by the United States on trading with China, which remains the main hub for chip production, is a significant negative for the industry.
Zacks Industry Rank Indicates Bullish Prospects
The Zacks Electronics - Miscellaneous Components industry is housed within the broader Zacks Computer and Technology sector. It carries a Zacks Industry Rank #89, which places it in the top 36% of more than 250 Zacks industries.
The group’s Zacks Industry Rank, the average of the Zacks Rank of all the member stocks, indicates bullish near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than two to one.
The industry’s positioning in the top 50% of the Zacks-ranked industries is a result of the positive earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts are optimistic about this group’s earnings growth potential. Since March 31, 2025, the industry’s earnings estimates for the current year have moved 4.5% up.
Given the bullish prospects, there are a number of stocks that investors can choose to pick for a healthy portfolio. However, before we present the stocks, let us look at the industry’s recent stock-market performance and the valuation picture.
Industry Beats S&P 500, Meets Sector
The Zacks Electronics - Miscellaneous Components industry has outperformed the Zacks S&P 500 composite but was in line with the broader Zacks Computer and Technology sector in the past year.
The industry has appreciated 27.1% over this period compared with the S&P 500’s 19.1% growth.
One-Year Price Performance
Industry's Current Valuation
Based on the forward 12-month price to earnings (P/E), a commonly used multiple for valuing electronics – miscellaneous components stocks, the industry is currently trading at 22.69X compared with the S&P 500’s 21.86X and the sector’s 28.39X.
In the past five years, the industry has traded as high as 22.69X and as low as 17.04X, with a median of 18.74X, depicted in the charts below.
Forward 12-Month Price-to-Earnings (P/E) Ratio
3 Electronics - Miscellaneous Components Stocks to Buy
TE Connectivity: This Zacks Rank #1 (Strong Buy) stock is expected to benefit from strong demand for its solutions in the AI domain, as well as energy applications. You can see the complete list of today’s Zacks #1 Rank stocks here.
The company is benefiting from strength in Asia in the Transportation segment, where increased data connectivity trends and the ongoing growth of the electrified powertrain. TEL’s global manufacturing strategy with 70% localized production is helping the company expand margins and generate free cash flow. TE Connectivity expects the trend to continue in the near term, along with positive forex. The company expects fourth-quarter fiscal 2025 sales to increase 6% organically on a year-over-year basis to $4.55 billion.
TE Connectivity shares have appreciated 42.8% in the year-to-date period. The Zacks Consensus Estimate for the company’s fiscal 2025 earnings has increased 3.5% to $8.54 per share in the past 30 days.
Price and Consensus: TEL
nVent Electric: This Zacks Rank #1 company is benefiting from strong data center order growth. The Trachte and Electrical Products Group acquisitions are performing better than expected, further strengthening NVT’s position in the high-growth infrastructure vertical, including power utilities, data centers and renewables.
nVent Electric shares have appreciated 34.7% year to date. The Zacks Consensus Estimate for 2025 earnings has increased 6.1% to $3.28 per share in the past 30 days.
Price and Consensus: NVT
Fabrinet shares have returned 58.4% in the year-to-date period. The Zacks Consensus Estimate for FN’s fiscal 2026 earnings has been revised upward by 3.4% to $10.16 per share over the past 30 days.
Price and Consensus: FN
