Finance

3 stocks to buy from a prospering electronics components industry

Zacks.com · Jul 22, 2026 17:25 · 5 min read

3 Stocks to Buy From a Prospering Electronics Components 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 nVent Electric NVT, Forgent Power Solutions FPS and Vicor VICR are well-poised to benefit from the solid adoption of 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: 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: Tariffs 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, are significant negatives 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 #60, which places it in the top 24% 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.

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 Lags S&P 500 and Sector

The Zacks Electronics - Miscellaneous Components industry has underperformed the Zacks S&P 500 composite and the broader Zacks Computer and Technology sector in the past year.

The industry has appreciated 0.7% over this period compared with the S&P 500’s return of 20.9% and the broader sector’s 30.6%.

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 24.94X compared with the S&P 500’s 20.85X and the sector’s 23.95X.

In the past five years, the industry has traded as high as 28.51X and as low as 20.27X, with a median of 21.97X, depicted in the charts below.

Forward 12-Month Price-to-Earnings (P/E) Ratio

3 Electronics - Miscellaneous Components Stocks to Buy

nVent Electric: This Zacks Rank #1 (Strong Buy) company benefits from durable infrastructure demand as AI-driven data center buildouts and grid upgrades lift orders, backlog and revenue visibility. You can see the complete list of today’s Zacks #1 Rank stocks here.

nVent remains well positioned to benefit from the accelerating AI infrastructure build-out, with management highlighting strong demand across both white-space and gray-space data center applications. Investments in liquid cooling, engineered building solutions and expanded manufacturing capacity, including the new Blaine facility, are expected to support sustained growth. The company also sees long-term opportunities from power grid modernization, electrification and utility infrastructure spending.

nVent shares have returned 57.6% year to date. The Zacks Consensus Estimate for NVT’s 2026 earnings has been revised upward by a penny to $4.56 per share over the past 30 days.

Price and Consensus: NVT

Forgent Power Solutions: This Zacks Rank #1 company continues to benefit from exceptionally strong demand across AI data centers and grid infrastructure, with record bookings, a 2.3 times book-to-bill ratio and nearly $2 billion of backlog providing excellent revenue visibility.

Forgent’s integrated Powertrain Solutions strategy, engineering-led customer engagement and vertically integrated manufacturing model are helping it gain market share and win large multi-product contracts. The company also expects margin expansion and stronger free cash flow as new production facilities ramp and utilization improves through fiscal 2027.

Forgent shares have returned 39% year to date. The Zacks Consensus Estimate for FPS’ 2026 earnings has been revised upward by a penny to 68 cents per share over the past 30 days.

Price and Consensus: FPS

Vicor: This Zacks Rank #2 (Buy) company’s long-term outlook is increasingly tied to AI infrastructure, where its second-generation Vertical Power Delivery (VPD) technology addresses growing power density requirements for hyperscalers and advanced computing systems.

Vicor expects strong Advanced Products growth, expanding licensing revenues, increasing backlog and continued capacity expansion to support higher product shipments. The company also sees significant opportunities from aerospace, industrial and defense markets, while future licensing agreements with OEMs and hyperscalers could become an additional high-margin growth driver.

Vicor shares have jumped 95.9% in the year-to-date period. The Zacks Consensus Estimate for the company’s 2026 earnings has increased 8.5% to $2.94 per share in the past 30 days.