TE Connectivity Ltd

Most Asia-Pacific markets fell today, with semiconductor stocks swinging wildly and tumbling sharply after US markets closed lower overnight amid concerns over stock valuations, fierce competition, and AI spending. South Korea's SK Hynix dropped more than 10%, even as quarterly profit surged 557% but missed analyst expectations, while Samsung Electronics fell over 4%, and LG Innotek and Seoul Semiconductor sank 9% and more than 6% respectively. Japanese chip names also declined, with Kioxia plunging 10%, Tokyo Electron down 8.5%, and SoftBank Group losing over 7%. China's ChiNext 300 index shed 1.83% and the Hang Seng China Semiconductor Chips Index slumped more than 5%, while Taiwan's TSMC eased 1.32%. Crude oil prices jumped nearly 4% after Middle East attacks shattered a brief calm amid US-Iran tensions, with WTI rising 3.09 dollars to 82.35 dollars a barrel and Brent adding 3.3 dollars to 87.39 dollars a barrel.

Asian technology stocks faced continued selling pressure in Wednesday trading, with semiconductor shares leading the market lower. Investors remain concerned about elevated valuations, intensifying competition in artificial intelligence, and the drag from a weaker US stock market overnight. In South Korea, SK Hynix, the world's major memory chip maker, tumbled more than 10% even after reporting record quarterly profit and revenue. The figures fell short of analyst expectations, triggering heavy selling. The pressure spread to other domestic tech names, with Samsung Electronics down over 4%, LG Innotek plunging more than 9%, and Seoul Semiconductor losing over 6%. In Japan, Kioxia dropped as much as 10%, Tokyo Electron fell 8.5%, and SoftBank Group declined more than 7%. In Taiwan, TSMC slipped 1.32%. In China, the ChiNext 300 Index lost 1.83% and the Hang Seng China Semiconductor Chips Index sank more than 5%, underscoring the broad regional sell-off. Bucking the trend, Chinese internet stocks listed in Hong Kong moved higher, with Tencent up 3.6% and Meituan gaining 2.7%, while Alibaba, Baidu, and Kuaishou also traded in positive territory.

The Nikkei average extended its losses in the morning session, falling 1.08% from the previous trading day to 61,689.86. After the previous day's sharp decline, bargain-hunting aimed at a self-sustaining rebound emerged in early trading, briefly lifting the index 1.24% to 63,138.04, but it later sank into negative territory, at one point dropping 1.86% to 61,201.98. South Korean semiconductor giant SK Hynix reported second-quarter operating profit of 60.5 trillion won, a record high, but it fell short of the 64 trillion won analyst consensus compiled by LSEG, and the Kospi index briefly tumbled more than 6%, weighing on investor sentiment. On the Tokyo Stock Exchange Prime Market, semiconductor-related stocks were heavily sold, with Screen Holdings plunging over 16% and Tokyo Electron falling more than 9%. Reiko Sera of Sumitomo Mitsui Trust Bank noted that AI and semiconductor-related shares had risen on high expectations, so even after SK Hynix's results, the rebound from the previous day's sharp drop remains limited.

Tinavi plans to acquire a 62% stake in Shanghai Orthopaedics through a share issuance and raise matching funds, which is expected to constitute a major asset restructuring. The company's shares will resume trading on July 30. Moonshot AI's Kimi has completed its Series F funding round, raising over $3.5 billion, with a post-money valuation of $35 billion. The round closed early after being oversubscribed by more than three times the target amount. The Series G round, originally scheduled to start in August, has already been launched ahead of schedule, with a pre-money valuation rising to $50 billion. The Shanghai Stock Exchange has terminated its review of Taosheng Technology's IPO on the STAR Market. Samsung Electro-Mechanics will raise MLCC product shipment prices by 30% starting August 1, while Taiyo Yuden will increase MLCC prices from September 1. Quanta Computer plans to raise up to $2.19 billion through a global depositary share offering. A magnitude 7.1 earthquake in Kumamoto Prefecture, Japan, has halted production at several semiconductor plants, including those of Sony Semiconductor, Renesas Electronics, and Tokyo Electron. Shenzhen has issued a plan to strengthen the research, development, and application of general and vertical models, on-device models, physical AI models, and high-performance intelligent agents.

TE Connectivity reported record fiscal third-quarter results with net revenue rising 14% year-over-year to $5.16 billion and adjusted earnings per share of $2.94, beating estimates, yet shares fell roughly 7% as fourth-quarter guidance pointed to a sequential deceleration. Orders surged 27% to a record $5.7 billion, driven by a more than 70% year-to-date increase in data center connection and power distribution orders amid AI cloud momentum. The company also announced a $1.4 billion agreement to acquire Astrodyne TDI, which will add approximately $250 million in annual revenue to its Industrial Solutions segment. Management guided for fiscal fourth-quarter sales of about $5.25 billion and adjusted earnings per share of $3.05, representing slower growth compared to the third quarter. TE Connectivity trades at a forward price-to-earnings ratio of about 16x, a discount to both the technology hardware median of 21x and direct peer Amphenol's multiple of over 26x.

Shares of memory and AI-related stocks fell in premarket trading on Tuesday after Japan's Nikkei 225 dropped about 3.95% and South Korea's Kospi Index sank 10.84%. Memory maker Kioxia plummeted around 18.3%, Tokyo Electron tumbled about 11%, and Advantest slumped nearly 10% in Japan, while SK hynix fell about 15% and Samsung Electronics slumped nearly 13% in South Korea. Analysts cited concerns over AI infrastructure financing, China's technological advances, and growing competition, with Kiwoom Securities' Han Ji-young noting that reports of a Chinese company developing domestic DUV lithography systems reignited fears of accelerated capacity expansion by Chinese memory-chip makers. CXMT's strong stock-market debut on Monday added to oversupply worries, though Mercer Investments' Cameron Systermans said CXMT is likely years behind South Korean competitors in High-Bandwidth Memory. In the US, Micron Technology fell around 5%, Nvidia dipped about 1% after a report on its $19.6 billion lease commitment for a Texas data center, and chip equipment makers ASML, Applied Materials, Lam Research, and KLA all declined.

Chip stocks tanked across Asia on Tuesday, rattled by the threat of Chinese competition and worries about who is paying for the AI boom, while sliding oil prices did little to allay nerves about U.S. rate hikes potentially starting as soon as this week. South Korea's KOSPI dived almost 10% to a three-month low, triggering a circuit breaker and heading for its largest monthly fall since the Asian financial crisis in 1997, with SK Hynix and Samsung Electronics each losing more than 12%. Japan's Nikkei slid about 4% to a two-year low, following a 2.2% drop for the Philadelphia Semiconductor index on Monday, as market darlings Kioxia fell 18% and Tokyo Electron dropped 11%. The selloff was fueled by a report that China has begun manufacturing domestically developed immersion deep ultraviolet lithography machines, sending ASML shares down 8.5%, and by CXMT Corp's $8.6 billion listing that made it China's most valuable company, raising fears of accelerated capacity expansion to rival Korean firms. Nvidia shares shed 5% overnight after the Wall Street Journal reported the company is in talks to provide roughly $250 billion in financing guarantees for OpenAI as part of a massive data centre project. Brent crude futures extended Monday's nearly 9% plunge, falling more than 1% to $87.19 a barrel, as a lull in U.S.-Iran hostilities followed Washington's suspension of air strikes, while markets priced a 38% chance that the Federal Reserve hikes by 25 basis points on Wednesday.

Tokyo stocks plunged more than 4% in morning trade today, with the Nikkei 225 falling 2,701.42 points, or 4.16%, to 62,229.77, and the Topix index dropping 2.92% to 3,947.25. Semiconductor shares led the decline, tracking losses in their US peers amid uncertainty over the return on investment in artificial intelligence. Tokyo Electron slumped over 10%, while Advantest fell 10.25% and SoftBank Group lost 6%. Kioxia tumbled more than 17%. Across the Asia-Pacific region, markets were broadly lower. South Korea's Kospi index plunged as much as 8% after SK Hynix dived 11% and Samsung Electronics dropped 9.5%, prompting the Korea Exchange to trigger a 20-minute temporary trading halt. Taiwan's TAIEX fell 3.79%, with TSMC down over 2%. China's SSE Composite Index slipped 0.93%, bucking the trend of Hong Kong's Hang Seng Index, which rose 0.59%.

The Nikkei 225 index fell more than 2% in Friday trading, after Alphabet, the parent company of Google, tumbled sharply on its announcement of increased artificial intelligence investment and negative free cash flow, sparking investor concerns worldwide about the payoff of AI spending. As of Friday morning local time, the Nikkei 225 had dropped 2.69% to 64,634.04 points, while the TOPIX index declined 1.28% to 4,002.09 points. Since the start of the month, the Nikkei has fallen over 7% and entered correction territory, influenced by weakness in global technology stocks, particularly South Korea's KOSPI and the US Philadelphia Semiconductor Index. Semiconductor shares faced heavy selling, with Advantest plunging 6.33% and Tokyo Electron falling 5.43%, while SoftBank Group tumbled 7.42% and Kioxia dropped 4.4%. However, stocks tied to domestic demand bucked the trend, with Central Japan Railway rising 1.17% and East Japan Railway gaining 0.6%, while Otsuka Holdings climbed 1.6%, becoming the top gainer on the Nikkei during morning trading.

AI and chip stocks were under pressure again Friday, with the selloff spreading from Japan to U.S. premarket trading. Japan's Nikkei 225 dropped 4%, led by Kioxia plunging nearly 16%, Tokyo Electron falling about 8%, and Advantest losing around 7%. That weakness quickly spilled into U.S.-listed chip stocks, with Nvidia, AMD, TSMC, Broadcom, Arm and Intel all trading lower before the bell. Adding to the pressure, Alibaba-backed Moonshot unveiled Kimi K3, a 2.8 trillion-parameter open-weight AI model that it says can compete with some of the strongest U.S. systems, reinforcing the sense that Chinese developers are moving faster than many investors expected.

Evercore ISI downgraded TE Connectivity to In Line from Outperform and lowered its price target to $230 from $260, citing that the current valuation already reflects the company's long-term potential amid near-term uncertainty. The firm remains constructive on structural growth drivers from AI and energy but sees a less favorable 12-month risk/reward, noting that AI remains a small portion of overall revenue. TE Connectivity reported fiscal second-quarter 2026 net sales of $4.74 billion, up 7% organically and 15% on a reported basis year over year, with adjusted earnings per share reaching a record $2.73, a 24% increase.

Evercore maintained Amphenol as its top pick while adopting a more cautious near-term stance on TE Connectivity and Sensata Technologies, noting that near-term fundamentals are choppy though long-term trends remain intact. The connector market grew about 14.7% year-over-year to roughly $99.2 billion in 2025, significantly above prior estimates of around 7.9%, reinforcing the sector's attractiveness. Looking into 2026, analysts expect sustained momentum driven by AI-related IT and telecom strength, a recovery in industrial segments supported by energy transition and automation, while automotive faces headwinds from slower EV adoption and China slowdown. Amphenol, rated Outperform with a $180 price target, is seen as best positioned to capitalize on the AI investment cycle given its leading position in copper and fiber, robust M&A strategy, and agile cost structure. TE Connectivity was downgraded to In-Line from Outperform with a $230 price target due to near-term pressures from higher automotive exposure, while Sensata, rated In Line with a $43 target, shows improving margins and free cash flow but faces balanced risk/reward amid auto and HVAC softness.