We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
3 Electronics Stocks to Buy From a Prospering Industry
Read MoreHide Full Article
The Zacks Electronics – Miscellaneous Products industry players like Teradyne (TER - Free Report) , Flex (FLEX - Free Report) and Bel Fuse (BELFB - Free Report) are benefiting from higher spending on AI infrastructure, data center, cloud computing, augmented reality (AR), virtual reality (VR) and intelligent climate solutions. Continuing investments in data centers, high-performance computing and 5G end markets are the key catalysts. Fab (foundry) expansion in the United States, South Korea, Taiwan and China, as well as higher spending on memory equipment, is expected to drive growth in 2025 and beyond. However, the industry has been suffering from challenging macroeconomic conditions due to higher tariffs, trade restrictions and project deferrals in automotive and energy end-markets. The global economic turmoil is expected to keep the semiconductor capex in check, which does not bode well for industry participants in the near term.
Industry Description
The Zacks Electronics – Miscellaneous Products industry includes a number of original equipment manufacturers of power products, drivetrains, green energy solutions, remote-control systems, GPS navigation, home automation systems, healthcare devices, industry/factory automation, robotics, semiconductor and optical applications and energy management solutions. The industry is evolving on digital transformation and the growing demand for silicon across multiple markets. The increasing cost of manufacturing bodes well for equipment suppliers, while the growing demand for silicon is positive for semiconductor companies. Apart from the United States, companies in this industry are based in Japan, Germany, the Netherlands and Switzerland. These companies either have manufacturing operations in China and Southeast Asia or generate significant revenues from these regions.
3 Trends Shaping the Future of the Industry
Solid Capital Spending Drives Prospects: Ongoing technology transition due to rapid deployment of artificial intelligence (AI) is driving product complexities, which is raising the demand for solutions provided by industry participants. More complex designs, accelerating product cycles and high-value wafer volumes are growing the demand for advanced packaging. Increasing investment in expanding manufacturing capacity by semiconductor companies is a key catalyst in the long run. Since semiconductor companies are major customers of miscellaneous electronics product manufacturers, the trend bodes well for industry participants. In addition, rising spending on advanced nodes — 7 nm, 5 nm and 3 nm processes from logic and foundry customers — favors industry participants. Logic and foundry spending is anticipated to be healthy this year.
Strong Demand for AI, Data Center and Cloud Computing Solutions: Industry participants are riding on strong demand for AI infrastructure, data center and cloud computing solutions. Wearables and AR and VR-supported display systems in defense, industrial, consumer applications and healthcare end markets are another prospect.
Challenging Macroeconomic Conditions Acts as Headwind: Industry participants are suffering from challenging macroeconomic conditions globally, with enterprises in automotive, industrial and energy end-markets showing reluctance in committing to multi-year deals. Higher tariffs and inflation do not bode well for industry participants.
Zacks Industry Rank
The Zacks Electronics – Miscellaneous Products industry is housed within the broader Zacks Computer and Technology sector. It carries a Zacks Industry Rank #60, which places it in the top 25% of more than 250 Zacks industries.
The group’s Zacks Industry Rank, which is the average of the Zacks Rank of all 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 June 30, 2025, earnings estimates for the industry for the current year have moved north by 3.6%.
Given the bullish prospects, there are many stocks worth buying in the industry. But before we present those stocks, let us take a look at the industry’s recent stock-market performance and valuation picture.
Industry Beats S&P 500, Broader Sector
The Zacks Electronics – Miscellaneous Products industry has outperformed the S&P 500 and the broader Zacks Computer and Technology sector in the past year.
The industry has appreciated 29.9% during this period against the S&P 500 composite’s return of 17.9% and the broader sector’s appreciation of 24%.
One-Year Price Performance
Industry's Current Valuation
On the basis of the forward 12-month P/E, which is a commonly used multiple for valuing Electronics-Miscellaneous products companies, we see that the industry is currently trading at 24.7X compared with the S&P 500’s 23.21X and the sector’s forward-12-month P/E of 27.76X.
Over the last five years, the industry has traded as high as 24.7X and as low as 19.58X, with the median being 22.98X, as the charts below show.
The company is benefiting from strong growth across most of its end markets, including the commercial aerospace, defense and networking sectors. New incremental demand in the networking market, driven by AI, is driving BELFB’s prospects.
The Zacks Consensus Estimate for Bel Fuse’s 2025 earnings has been steady at $6.80 per share over the past 30 days. For 2026, the consensus mark for earnings has been steady at $7.35 per share.
Price and Consensus: BELFB
Teradyne: A Zacks Rank #2 (Buy) stock, Teradyne, is benefiting from strong AI-related demand that is driving up huge investments in cloud AI build-out as customers accelerate production of a wide range of AI accelerators, networking, memory and power devices. AI compute is witnessing rapid technological progress, which is bringing rapid transformation to design, process and packaging technologies for AI compute. This trend bodes well for Teradyne’s long-term prospects.
The Zacks Consensus Estimate for Teradyne’s 2025 earnings has increased six cents to $3.51 per share over the past 30 days. For 2026, the consensus mark for 2026 earnings is pegged at $5.08 per share, up 9 cents per share over the past 30 days. Teradyne shares have appreciated 49.6% in the trailing 12-month period.
Price and Consensus: TER
Flex: This Zacks Rank #2 company is pivoting to the data center market and expects $6.5 billion in revenue from data centers, implying year-over-year growth of at least 35%. Flex’s global manufacturing scale is one of its most significant competitive advantages. The company’s global scale and capabilities support its regionalization strategies by bringing manufacturing closer to end markets, enhancing agility, reducing risks and meeting evolving trade requirements. Flex operates more than 49 million square feet globally, including 7 million square feet in the United States and 9 million in Mexico, giving it one of the largest advanced manufacturing footprints in North America.
Flex shares have surged 65.7% in a year. The consensus mark for Flex’s fiscal 2026 earnings has been unchanged at $3.14 per share over the past 30 days. For fiscal 2027, the Zacks Consensus Estimate for earnings is pegged at $3.47 per share, unchanged over the past 30 days.
Price and Consensus: FLEX
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
3 Electronics Stocks to Buy From a Prospering Industry
The Zacks Electronics – Miscellaneous Products industry players like Teradyne (TER - Free Report) , Flex (FLEX - Free Report) and Bel Fuse (BELFB - Free Report) are benefiting from higher spending on AI infrastructure, data center, cloud computing, augmented reality (AR), virtual reality (VR) and intelligent climate solutions. Continuing investments in data centers, high-performance computing and 5G end markets are the key catalysts. Fab (foundry) expansion in the United States, South Korea, Taiwan and China, as well as higher spending on memory equipment, is expected to drive growth in 2025 and beyond. However, the industry has been suffering from challenging macroeconomic conditions due to higher tariffs, trade restrictions and project deferrals in automotive and energy end-markets. The global economic turmoil is expected to keep the semiconductor capex in check, which does not bode well for industry participants in the near term.
Industry Description
The Zacks Electronics – Miscellaneous Products industry includes a number of original equipment manufacturers of power products, drivetrains, green energy solutions, remote-control systems, GPS navigation, home automation systems, healthcare devices, industry/factory automation, robotics, semiconductor and optical applications and energy management solutions. The industry is evolving on digital transformation and the growing demand for silicon across multiple markets. The increasing cost of manufacturing bodes well for equipment suppliers, while the growing demand for silicon is positive for semiconductor companies. Apart from the United States, companies in this industry are based in Japan, Germany, the Netherlands and Switzerland. These companies either have manufacturing operations in China and Southeast Asia or generate significant revenues from these regions.
3 Trends Shaping the Future of the Industry
Solid Capital Spending Drives Prospects: Ongoing technology transition due to rapid deployment of artificial intelligence (AI) is driving product complexities, which is raising the demand for solutions provided by industry participants. More complex designs, accelerating product cycles and high-value wafer volumes are growing the demand for advanced packaging. Increasing investment in expanding manufacturing capacity by semiconductor companies is a key catalyst in the long run. Since semiconductor companies are major customers of miscellaneous electronics product manufacturers, the trend bodes well for industry participants. In addition, rising spending on advanced nodes — 7 nm, 5 nm and 3 nm processes from logic and foundry customers — favors industry participants. Logic and foundry spending is anticipated to be healthy this year.
Strong Demand for AI, Data Center and Cloud Computing Solutions: Industry participants are riding on strong demand for AI infrastructure, data center and cloud computing solutions. Wearables and AR and VR-supported display systems in defense, industrial, consumer applications and healthcare end markets are another prospect.
Challenging Macroeconomic Conditions Acts as Headwind: Industry participants are suffering from challenging macroeconomic conditions globally, with enterprises in automotive, industrial and energy end-markets showing reluctance in committing to multi-year deals. Higher tariffs and inflation do not bode well for industry participants.
Zacks Industry Rank
The Zacks Electronics – Miscellaneous Products industry is housed within the broader Zacks Computer and Technology sector. It carries a Zacks Industry Rank #60, which places it in the top 25% of more than 250 Zacks industries.
The group’s Zacks Industry Rank, which is the average of the Zacks Rank of all 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 June 30, 2025, earnings estimates for the industry for the current year have moved north by 3.6%.
Given the bullish prospects, there are many stocks worth buying in the industry. But before we present those stocks, let us take a look at the industry’s recent stock-market performance and valuation picture.
Industry Beats S&P 500, Broader Sector
The Zacks Electronics – Miscellaneous Products industry has outperformed the S&P 500 and the broader Zacks Computer and Technology sector in the past year.
The industry has appreciated 29.9% during this period against the S&P 500 composite’s return of 17.9% and the broader sector’s appreciation of 24%.
One-Year Price Performance
Industry's Current Valuation
On the basis of the forward 12-month P/E, which is a commonly used multiple for valuing Electronics-Miscellaneous products companies, we see that the industry is currently trading at 24.7X compared with the S&P 500’s 23.21X and the sector’s forward-12-month P/E of 27.76X.
Over the last five years, the industry has traded as high as 24.7X and as low as 19.58X, with the median being 22.98X, as the charts below show.
Forward 12-Month Price-to-Earnings (P/E) Ratio
3 Stocks to Buy Right Now
Bel Fuse: This Zacks Rank #1 (Strong Buy) company’s shares have appreciated 94.9% in a year. You can see the complete list of today’s Zacks #1 Rank stocks here.
The company is benefiting from strong growth across most of its end markets, including the commercial aerospace, defense and networking sectors. New incremental demand in the networking market, driven by AI, is driving BELFB’s prospects.
The Zacks Consensus Estimate for Bel Fuse’s 2025 earnings has been steady at $6.80 per share over the past 30 days. For 2026, the consensus mark for earnings has been steady at $7.35 per share.
Price and Consensus: BELFB
Teradyne: A Zacks Rank #2 (Buy) stock, Teradyne, is benefiting from strong AI-related demand that is driving up huge investments in cloud AI build-out as customers accelerate production of a wide range of AI accelerators, networking, memory and power devices. AI compute is witnessing rapid technological progress, which is bringing rapid transformation to design, process and packaging technologies for AI compute. This trend bodes well for Teradyne’s long-term prospects.
The Zacks Consensus Estimate for Teradyne’s 2025 earnings has increased six cents to $3.51 per share over the past 30 days. For 2026, the consensus mark for 2026 earnings is pegged at $5.08 per share, up 9 cents per share over the past 30 days. Teradyne shares have appreciated 49.6% in the trailing 12-month period.
Price and Consensus: TER
Flex shares have surged 65.7% in a year. The consensus mark for Flex’s fiscal 2026 earnings has been unchanged at $3.14 per share over the past 30 days. For fiscal 2027, the Zacks Consensus Estimate for earnings is pegged at $3.47 per share, unchanged over the past 30 days.
Price and Consensus: FLEX
