Avnet Inc. AVT is benefiting from strong demand in AI infrastructure, networking and industrial markets. In the third quarter of fiscal 2026, the company reported revenues of $7.1 billion, up 34% year over year and 13% sequentially. Management stated that AI data center, networking and industrial markets were the biggest growth drivers during the third quarter. The company also delivered record sales of $6.67 billion in its Electronic Components business, which increased 34.7% year over year on the back of robust demand across most end markets.
AI-related demand is becoming a larger part of AVT’s business. In the third quarter of fiscal 2026, management stated that the company’s direct exposure to AI and data center customers has increased from around 5-7% previously to nearly 10-15% now. Most of this business is tied to Asia, especially Taiwan, where demand from hyperscalers and server customers remains strong. Networking demand also improved across regions, with the Americas showing strong growth during the third quarter.
The company is also benefiting from demand for components that support AI infrastructure. AI buildouts are increasing demand for products tied to power management, cooling systems, connectors, capacitors, resistors and sensors. This helped AVT’s interconnect, passive and electromechanical (IP&E) business grow 25% year over year in the third quarter. The company noted that every AI accelerator requires surrounding IP&E products, creating additional sales opportunities beyond semiconductors.
AVT expects current demand trends to continue in the near term. With growing backlog levels and book-to-bill ratios above parity across all regions, supported by rising lead times across several component categories as supply conditions tighten, AVT remains well-positioned to continue seeing strong business momentum in the near term. For the fourth quarter of fiscal 2026, AVT expects revenues to be in the range of $7.3-$7.6 billion, implying approximately 5% sequential growth at the midpoint. The Zacks Consensus Estimate for fourth-quarter revenues is pegged at $7.46 billion, implying year-over-year growth of 32.8%.
How Competitors Fare Against Avnet
Avnet faces stiff competition from other global technology solutions providers such as Arrow Electronics Inc. ARW and TD SYNNEX SNX.
Arrow Electronics is one of the world’s largest distributors of electronic components, which focuses on selling semiconductor products, IP&E components and IT hardware and software to original equipment manufacturers and electronics manufacturing services providers. Arrow Electronics is witnessing robust growth in its Global Components segment, through which the company deals in semiconductor products and related services. In the first quarter of 2026, Global Component sales increased 39% year over year on a reported basis and 35% on a constant currency basis to $6.64 billion.
TD SYNNEX is a leading global IT distributor and solutions aggregator, providing a comprehensive range of technology distribution, logistics and integration services. TD SYNNEX’s portfolio includes cloud computing, cybersecurity, AI, networking, data center infrastructure and consumer electronics. In the first quarter of fiscal 2026, TD SYNNEX’s Hyve division, which focuses on hyperscale infrastructure solutions, noted strong growth in gross billings, driven by surging demand for cloud data centers and AI-powered workloads.
AVT’s Price Performance, Valuation & Estimates
Shares of AVT have surged 72.3% in the year-to-date period compared with the Zacks Electronics - Parts Distribution industry’s appreciation of 58%.
AVT YTD Price Return Performance
Image Source: Zacks Investment Research
In terms of forward price/sales, Avnet is trading at 0.25X compared with the industry’s 0.4X.
AVT Forward 12 Months (P/S) Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Avnet’s fiscal 2026 earnings is pegged at $4.92 per share, revised up by 30 cents over the past 30 days, marking a year-over-year increase of 43%.
Image Source: Zacks Investment Research
Avent currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
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This article originally published on Zacks Investment Research (zacks.com).