AMETEK, Inc. (AME) | The Buildout — AI Infrastructure

——Mkt cap — · 52-wk —–— · YTD — · delayed
Updated Sep 22, 2026Q2 FY2026 reviewed
AMETEK makes electronic instruments and electromechanical devices used in semiconductor, power, aerospace and medical applications.
Revenue +15% YoY
Q2 2026 sales a record $2.04B; organic growth 10%.
Orders +25% organic
Q2 orders $2.3B, a record; book-to-bill 1.12.
FY guide raised again
FY2026 adjusted EPS $8.20-$8.30; second raise in two quarters.
AI revenue not reported
Data center "not big enough to report on a specific segment."
The Buildout Takeaway
Orders have outrun revenue for two straight quarters, and the record backlog gives management visibility into next year. What is not visible is how much of that demand is AI infrastructure: management bundles data center with power infrastructure, defense modernization and commercial aerospace into one bucket it says is about half of the business, and the data-center piece inside it is not broken out.
Analyst coverage
29 analysts·20 Buy9 Hold0 Sell
Median target$272  Range $230–$316 · 8 estimates
Management guidance
FY2026: sales up approximately 10% · organic sales up mid- to high single digits · adjusted EPS $8.20-$8.30 · effective tax rate 18.5%-19% · capex approximately $160 million
Important: The Buildout is a data analytics platform. Content is generated by algorithms and AI agents using public filings, earnings transcripts, and market data. This is not personalized investment advice.
Our View

The Verdict

AMETEK makes electronic instruments and electromechanical devices. Its Electronic Instruments Group builds analytical and test instruments, precision metrology and optics, power monitoring and metering, uninterruptible power supplies and embedded computing. Its Electromechanical Group builds medical components, precision motion control, motors, blowers and pumps, heat exchangers and specialty metals. The AI-infrastructure link runs through a handful of niche product lines rather than the whole company: Zygo's precision metrology and optics are designed into semiconductor platforms, Abaco supplies ruggedized computing for semiconductor tools, and RTDS sells power-system simulation to hyperscalers and power-equipment makers. Management describes AMETEK as "a leader in niche markets where differentiated technology solutions play a mission-critical role in customers' most demanding applications."

Market Cap—
Revenue (TTM)$7.9B
Revenue Growth+12.7%
EBITDA Margin (TTM)31.5%
Net Debt$1.8B
Earnings Beats7 of 7
P/E (TTM)—
EV/EBITDA (TTM)—

What We Like

  • Organic orders grew 22% in Q1 2026 and 25% in Q2, against organic revenue growth of 5% then 10%. Backlog set records at $3.87B and then $4.11B.
  • Two consecutive guidance raises: FY2026 adjusted EPS moved from $7.87-$8.07 to $7.94-$8.14 and then to $8.20-$8.30.
  • EMG core margin expanded 410 bps in Q1 and 290 bps in Q2, on record Q2 sales of $723M and operating income up 32%.
  • Asset-light model: capex runs at about 2% of sales, management cites a return on tangible capital of about 100%, and Q2 free cash flow converted at 111% of net income.
  • Financial capacity: $495M of cash and $2.31B of total debt at 6/30/2026, with a revolver increased to $3.5B and maturity extended to June 2031.

What We’re Watching

  • Direct data-center/AI revenue is not reported — management says it is "not big enough to report on a specific segment" — so the size of the AI exposure cannot be verified from the disclosures.
  • EIG core margin rose 40 bps in each of the last two quarters, in the group that is about 65% of Q2 sales. The improvement rests on FARO entering core margins from July 2026 and management's "substantial margin upside" target over the following 6 to 12 months.
  • Roughly a fifth of the backlog is not expected to complete within a year. Management acknowledges the lumpy nature of large orders, and Q3 organic is modelled below Q2's 10% pace.
  • Indicor: $5.0B all-cash, completed 2026-08-26, 50% recurring revenue and a 10%-12% cost-synergy target not yet demonstrated. No financial contribution from it appears in any quarter in the source material.
Bottom Line

The thesis is strengthening on the operating evidence. Year-over-year revenue growth stepped up to 15% in Q2 FY2026, orders have run ahead of revenue for two quarters, backlog is at a record with about 80% expected to ship inside a year, and management has raised the same guideposts twice. Two things keep it from being clean: the margin improvement is concentrated in EMG while EIG — about two-thirds of sales — sits at 40 bps, and the AI/data-center share of the demand is not reported. The open question is whether the record order run-rate converts to revenue on management's timeline, and how much of it is genuinely AI infrastructure rather than one broad four-part bucket.

Next upQ3 2026 results are the next print, guided to sales up high single digits. They test whether the deliberate deceleration in the organic guide was conservatism, and whether FARO's move into core margins lifts EIG.
Last Quarter — Q2 FY2026

Earnings Beat

AMETEK reported record second-quarter 2026 revenue of $2.04B, up 15% year over year, with organic growth of 10%. Gross margin was 36.0%. The standout was the order book: a record $2.3B, up 28% overall and 25% organically, pushing backlog to a record $4.11B.

MetricQ2 FY2026Q1 FY2026Q2 FY2025YoY
Revenue$2.0B$1.9B$1.8B+15.0%
Gross margin36.0%37.2%35.8%+20bps
EBITDA$634M$620M$569M+11.4%
EPS$1.77$1.74$1.55+14.4%
Orders$2.3B$2.2Bn/a+28% overall; +25% organic
Backlog$4.11B$3.87Bn/aRecord; book-to-bill 1.12
I think that the data center/AI part of it, along with the military modernization, along with the commercial aerospace, along with the power infrastructure, I put that whole bucket together, and it's about half of our business. In terms of data center, in the data center, it's actually smaller, but in all the related parts of it in terms of semiconductor, in terms of the power grid, in terms of the items that I talked about, it's actually quite broad and broadening… But in the data center, it's not big enough to report on a specific segment.— David Zapico, Chairman and CEO, 2026-08-04

Management tone: Tone stepped up from the Q1 to the Q2 2026 call. Management used words like "fantastic," "exceptional" and "outstanding," and introduced new umbrella language — "I believe we're in the beginning stages of a multiyear infrastructure build-out." The change shows in what management chose to emphasize: a second consecutive guidance raise, a bigger order print, and a named data-center hyperscaler order rather than Q1's "large power equipment providers." Management still describes its own guide as carrying "a bit of AMETEK prudence or conservatism." On the harder questions it was direct on order cadence, the margin bridge and the absence of tariff refunds, and declined to give a precise Q3 organic number.

Management Guidance

Management guided FY2026 to overall sales up approximately 10%, organic sales up mid- to high single digits, and adjusted EPS of $8.20-$8.30. It initiated Q3 2026 guidance of sales up high single digits. Other guideposts: effective tax rate 18.5%-19%, capex of approximately $160 million, and D&A of approximately $430 million including about $210 million of after-tax acquisition-related intangible amortization. Management said the revised second-half organic guide is 1.5 to 2 points stronger than the prior guide with the EPS flowing through, and described the guide as carrying "a bit of AMETEK prudence or conservatism built into it." It also said it expects to deploy $5 billion on the Indicor acquisition.

Business Trajectory

Trajectory

Revenue has accelerated on a year-over-year basis, from 11% growth in Q1 FY2026 to 15% in Q2 on record sales of $2,044M. Organic growth went from 5% to 10% across the same two quarters. Gross margin was 37.2% in Q1 and 36.0% in Q2, while EBITDA margin ran 32.2% then 31.0%. The operating story is the order book: organic orders grew 22% then 25% against organic revenue of 5% then 10%, and backlog rose from $3.87B to $4.11B at a book-to-bill of 1.12. Margin expansion is concentrated in the smaller group — EMG core margin rose 410 bps in Q1 and 290 bps in Q2 — while EIG core margin rose 40 bps in each quarter.

Revenue & Margin Trajectory
RevenueGross margin$0$1.0B$2.0B$945M$973M$1.0B$1.1B$1.1B$1.1B$1.2B$1.2B$1.2B$1.3B$1.3B$1.3B$1.3B$1.3B$1.2B$1.0B$1.1B$1.2B$1.2B$1.4B$1.4B$1.5B$1.5B$1.5B$1.6B$1.6B$1.6B$1.6B$1.6B$1.7B$1.7B$1.7B$1.7B$1.8B$1.7B$1.8B$1.9B$2.0B$1.9B$2.0B33%36%Q3'16Q4Q1'17Q2Q3Q4Q1'18Q2Q3Q4Q1'19Q2Q3Q4Q1'20Q2Q3Q4Q1'21Q2Q3Q4Q1'22Q2Q3Q4Q1'23Q2Q3Q4Q1'24Q2Q3Q4Q1'25Q2Q3Q4Q1'26Q2
RevenueGross margin$0$1.0B$2.0B$945M$973M$1.0B$1.1B$1.1B$1.1B$1.2B$1.2B$1.2B$1.3B$1.3B$1.3B$1.3B$1.3B$1.2B$1.0B$1.1B$1.2B$1.2B$1.4B$1.4B$1.5B$1.5B$1.5B$1.6B$1.6B$1.6B$1.6B$1.6B$1.7B$1.7B$1.7B$1.7B$1.8B$1.7B$1.8B$1.9B$2.0B$1.9B$2.0B33%36%Q3'16Q4Q1'17Q2Q3Q4Q1'18Q2Q3Q4Q1'19Q2Q3Q4Q1'20Q2Q3Q4Q1'21Q2Q3Q4Q1'22Q2Q3Q4Q1'23Q2Q3Q4Q1'24Q2Q3Q4Q1'25Q2Q3Q4Q1'26Q2
Gross margin as reported.
Share Price — 12 Months
$100$200$052-wk high $256Sep '25DecMar '26JunSep '26
52-week range $183–$256.
Share Price — 12 Months
$100$200$052-wk high $256Sep '25DecMar '26JunSep '26
52-week range $183–$256.
The Numbers

The Model

The model projects FY+1 revenue of $8,581M and EBITDA of $2,746M, a 32.0% margin. For FY+2 it projects revenue of $10,006M and EBITDA of $3,252M, a 32.5% margin. The near-term anchor is the record order book, with roughly 80% expected to ship within twelve months, plus the addition of Indicor, which closed 2026-08-26. The second year depends on the multiyear infrastructure build-out management describes and on whether the order run-rate converts into sales.

Revenue & EBITDA Projections
REVENUE$7.4B$8.6B$10.0BFY25FY+1 (E)FY+2 (E)EBITDA & MARGIN$2.4B$2.7B$3.3B32.5%FY25FY+1 (E)FY+2 (E)
REVENUE$7.4B$8.6B$10.0BFY25FY+1 (E)FY+2 (E)EBITDA & MARGIN$2.4B$2.7B$3.3B32.5%FY25FY+1 (E)FY+2 (E)
Solid bars are reported actuals; outlined bars are model projections — not company guidance.
MetricFY2025Next FY (E)Following FY (E)
Revenue$7.4B$8.6B$10.0B
YoY Growth—+15.9%+16.6%
EBITDA$2.4B$2.7B$3.3B
EBITDA Margin31.8%32.0%32.5%

Projections are the median of 5 independent model runs. The model’s revenue sits 22.9% above analyst consensus.

Management guided FY2026 to overall sales up approximately 10%, organic sales up mid- to high single digits, and adjusted EPS of $8.20-$8.30. It initiated Q3 2026 guidance of sales up high single digits. Other guideposts: effective tax rate 18.5%-19%, capex of approximately $160 million, and D&A of approximately $430 million including about $210 million of after-tax acquisition-related intangible amortization. Management said the revised second-half organic guide is 1.5 to 2 points stronger than the prior guide with the EPS flowing through, and described the guide as carrying "a bit of AMETEK prudence or conservatism built into it." It also said it expects to deploy $5 billion on the Indicor acquisition.

What Could Go Right — and Wrong

What good looks like
  • Organic orders keep running at high rates and the backlog converts on the roughly 80%-within-twelve-months timeline, pushing revenue growth above the current guide.
  • FARO delivers the "substantial margin upside over the next 6 to 12 months" management pointed to, lifting EIG core margin off its 40 bps level.
  • Indicor integration confirms the 10%-12% cost-synergy target and adds its 50% recurring-revenue mix.
  • Power grows faster than the mid-single-digit organic guide management reaffirmed twice, as strong orders convert into sales.
  • The data-center/AI piece becomes separately reportable, giving the thematic exposure a verifiable number.
What could go wrong
  • The order gap turns out to be lumpy bookings or lead-time pull-forward rather than demand, and revenue conversion slips; a fifth of the Q1 backlog already sat beyond twelve months.
  • A hyperscaler or fab capital-spending pause moves upstream into AMETEK's semiconductor optics, metrology and power orders. Neighbor concentration is high — one neighbor reports AI-related demand at about 70% of revenue, another at 80% data center.
  • EIG core margin stays flat at 40 bps if FARO's promised uplift does not arrive; EIG is about 65% of Q2 sales.
  • Tariff and inflation pressure outruns the pricing offset.
  • Integrating Indicor, First Aviation and FARO in the same window strains execution, and the Indicor cost-synergy target does not materialize.
What’s Next

Looking Ahead

The next twelve months turn on three things the source material flags. First, whether record orders convert to revenue — management says about 80% of that backlog ships within twelve months. Second, whether FARO and Indicor deliver the margins and synergies management has promised, with FARO folding into core margins from July 2026 and Indicor's 10%-12% cost-synergy target running from the 2026-08-26 close. Third, whether the AI/data-center piece becomes separately reportable. Against that, the second-half guide deliberately models organic deceleration, and management describes the guide as carrying "a bit of AMETEK prudence or conservatism."

Catalysts
  • July 2026FARO enters core margins — Laps one year of ownership; management sees margin upside ahead.
  • Q3 2026Q3 2026 results — Guided to sales up high single digits.
  • Q3 2026 onwardIndicor integration — Tests the $5.0B deal's 10%-12% cost-synergy target.
  • FY2026Free cash flow conversion — Q2 printed 111% of net income; trailing-twelve-month conversion 112%.
  • Next 6 to 12 monthsFARO margin delivery — Management targets "substantial margin upside" in this window.
Numbers

Financials

Annual Summary

MetricFY2024FY2025TTMYoY
Revenue$6.9B$7.4B$7.9B+6.6%
Gross Margin35.7%36.3%36.6%+60bps
EBITDA$2.2B$2.4B$2.5B+8.7%
EBITDA Margin31.2%31.8%31.5%+61bps
Net Income$1.4B$1.5B$1.6B+7.6%
Free Cash Flow$1.7B$1.7B$1.8B—
Net Cash————

Key Ratios (Trailing)

Valuation
  • P/E TTM—
  • EV/EBITDA TTM—
  • EV/Revenue TTM—
  • Price/FCF TTM—
Profitability
  • Gross Margin (TTM)36.6%
  • EBITDA Margin (TTM)31.5%
  • Net Margin (TTM)20.0%
  • ROIC12.4%
  • FCF Conversion73.7%
  • SBC / Revenue0.6%
Reference

The Company

AMETEK is a global manufacturer of electronic instruments and electromechanical devices, run through two operating groups. The Electronic Instruments Group makes advanced analytical, test and measurement instruments: process analyzers, spectrometers, level, pressure and temperature sensors and transmitters, radiation measurement devices, contact and non-contact metrology products, power monitoring and metering instruments, uninterruptible power supplies, programmable power supplies, airborne data systems, embedded computing systems and sensors and switches. The Electromechanical Group makes highly engineered medical components and devices, automation solutions, precision motion control, brushless motors, blowers and pumps, heat exchangers, electrical connectors and electronics packaging, and specialty metals. In Q2 2026 EIG sales were $1.32B and EMG sales $723M — about 65% and 35% of the quarter.

Management frames the portfolio as niche leaders in "high switching costs and regulatory-driven markets," IP-driven and asset-light. Capital expenditure runs at about 2% of sales and management cites a return on tangible capital of about 100%. As of December 31, 2025 the 10-K lists AMETEK operating facilities in China, Czechia, Malaysia, Mexico and Serbia, with EIG facilities in the United States, United Kingdom, Germany, Canada, Denmark, Finland, France, Switzerland, Argentina, Austria, Serbia and Mexico. Corporate headquarters is a leased facility in Berwyn, Pennsylvania. Management added on the Q2 2026 call that growth capex is going into multiple U.S. plants, Serbia and Mexico, with more work in Poland, and that the company runs shared-service infrastructure in India, Malaysia, Mexico, Serbia and Poland.

Business Segments

Electronic Instruments Group (EIG)
Q2 2026 sales $1.32B (about 65% of the quarter)
Advanced analytical, test and measurement instruments for process, aerospace, medical, research, power and industrial markets.
Growth driver: Semiconductor optics and metrology orders stood out
Electromechanical Group (EMG)
Q2 2026 record sales $723M (about 35% of the quarter)
Highly engineered medical components and devices, automation solutions, thermal management systems and specialty metals.
Growth driver: Paragon Medical design wins in MedTech

Competitive Landscape

AMETEK is a portfolio of businesses, and the source material frames competition business by business rather than against a single rival. Management describes the markets it competes in as niche, IP-driven and regulatory-driven, with high switching costs where "the price of failure is high." The strongest competitive claims in the evidence are design-in positions rather than market-share statistics: Zygo's solutions are "designed into leading semiconductor platforms," and Alphasense's A2GLF oxygen sensor is "designed to retrofit a large installed base along with next-generation instrument development." Two competitors are documented by their own filings naming AMETEK. The rest of the competitive map is inferred.

  • Allient Inc. (ALNT)
    Allient's own filing names Ametek among its competitors: "Our competitors include Ametek, Inc., Parker Hannifin Corporation, Regal Rexnord, and other smaller competitors." Mapped products are precision motion and motors for semiconductor equipment.
  • Ralliant Corp (RAL)
    Ralliant's own filing states that in its Test and Measurement segment its main competitors include Keysight Technologies, Rohde & Schwarz, Ametek and Teledyne Technologies, among others.
  • Keysight Technologies (KEYS)
    Listed in the wiring map as a competitor in test and measurement for semiconductor; named in Ralliant's filing rather than discussed by AMETEK.
  • Vertiv (VRT)
    Listed in the wiring map as a competitor in data-center UPS, power distribution and thermal management. The same map also lists Vertiv as a customer and a supplier.
The supply-chain wiring file carries 15 competitor relationships, of which two — Allient and Ralliant — are documented with quotes from those companies' own filings naming Ametek. The remaining rows are inferred spider/generation mappings, and several names appear in more than one role.

Supply Chain

AMETEK sits mid-chain: it buys electronic components, sensors, metals, motors and contract manufacturing, and sells instruments and engineered components into semiconductor equipment, power, aerospace, defense and medical customers. No neighbor transcript in the source set mentions AMETEK by name.

Supplier
Honeywell
Sensors, controls, actuators and variable-frequency drives
Supplier
Parker Hannifin
Motor components, housings and bearings
Supplier
Flex and Jabil
Contract manufacturing
Supplier
Eaton and Littelfuse
Circuit breakers and fuses
Supplier
Amphenol, Arrow and TE Connectivity
Electronic components and distribution
Supplier
Intel and TSMC
Semiconductor manufacturing
→
High switching costs, design-in status
AME
Two operating groups — EIG and EMG — on an asset-light footprint.
→
ASML
Zygo EUV projection optics and ZMI nanoscale metrology (inferred)
Hyperscalers / data-center operators
UPS, power conditioning, surge protection and RTDS simulation (inferred)
GE Vernova
Power monitoring instruments and gas turbine sensors (inferred)
BWXT
Nuclear-qualified instrumentation, precision motion and radiation measurement (inferred)
Aehr Test Systems and Teradyne
Programmable DC power supplies for burn-in and ATE (inferred)

Related companies

Likely customers
AEHR · Aehr Test SystemsASML · ASML HoldingBWXT · BWX TechnologiesGEV · GE VernovaSTX · Seagate Technology HoldingsTER · Teradyne
Competitors
ALNT · AllientRAL · Ralliant

See all Cooling companies → · How this layer works: Chapter 5, Cooling →

Analysis updated Sep 22, 2026, reviewing Q2 FY2026. Prices delayed. Built with The Buildout’s published methodology. Not investment advice. No positions held. © The Buildout 2026.

More on AME: Earnings recap