Avnet Jumps 81.5% YTD: Should You Buy, Sell or Hold the Stock?

Avnet Inc. AVT shares have soared 81.5% in the year-to-date period, outperforming the Zacks Electronics - Parts Distribution industry’s 63% growth.AVT YTD Performance ChartDespite this outperformance, AVT stock is trading at a price-to-sales multiple of 0.27X, which is below the P/S multiple of ind…

Avnet Inc. AVT shares have soared 81.5% in the year-to-date period, outperforming the Zacks Electronics - Parts Distribution industry’s 63% growth.

AVT YTD Performance Chart

Despite this outperformance, AVT stock is trading at a price-to-sales multiple of 0.27X, which is below the P/S multiple of industry’s P/S multiple of 0.39X. The undervaluation is further substantiated by Zacks Value Score of B.

AVT Forward 12-Month (P/S) Valuation Chart

The stock’s dynamics raise the question: Does it still have room to run, or is it time for investors to consider taking profits? Let’s find out.

AI Demand Drives AVT’s Top-Line Growth

Avnet 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. Avnet’s networking and industrial markets were the biggest growth drivers during the third quarter.

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.

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 quarter.

Since AI accelerators require 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%. The Zacks Consensus Estimate for fiscal 2026 revenues is pegged at $25.59 billion, implying year-over-year growth of 15.2%.

AVT Protects Margins as AI Demand Fuels Growth

Avnet’s focus on IP&E, embedded solutions and services continues to be the core driver of margin improvement through the cycle. During the third-quarter fiscal 2026 earnings call, management noted IP&E outperformance and continued conversion of design wins to revenues, supported by field application engineers and digital design tools. Demand creation revenues grew 16% sequentially in the third quarter, which supports a healthier pipeline for future shipments.

Avnet operates in a competitive technology distribution market where it competes with global component distributors as well as broader IT distributors, including Arrow Electronics ARW, TD SYNNEX SNX and CDW CDW. However, the company has created a niche for itself, which helps to protect its margins.

Arrow Electronics competes head-to-head with Avnet in electronic component distribution, semiconductor supply, embedded computing and engineering services. Both Arrow Electronics and Avnet serve OEMs, industrial manufacturers, automotive suppliers, communications equipment vendors and data center customers.

Avnet comes to a crossroads with CDW and TD SYNNEX as they form part of the AI infrastructure value chain. Avnet plays its role much earlier in the technology value chain by supplying electronic components directly to equipment manufacturers, making the overlap minimal with CDW and TD SYNNEX.

As AI infrastructure spending grows, these companies will share the fund pool. Avnet delivered record sales of $6.67 billion in its Electronic Components business, which increased 34.7% year over year. Avnet is entering an upcycle with demand improving across data center and AI builds, industrial, networking and aerospace/defense, driving better sales execution and operating margin expansion. The Zacks Consensus Estimate for AVT’s fiscal 2026 margin shows year-over-year growth rate of 49%. Estimates have remained unchanged in the past 30 days.

Conclusion: Buy AVT Stock Now

Avnet remains a compelling buy, supported by accelerating AI infrastructure demand, strong growth in networking and IP&E products, expanding margins and improving earnings outlook. Despite its sharp rally, the stock continues to trade at a valuation below the industry average, offering attractive upside as AI-driven component demand and industrial spending remain robust. AVT carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

7 Best Stocks for the Next 30 Days

Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."

Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.9% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report