3 Stocks to Buy in a Booming Electronics Sector

Industry Overview

The Zacks Electronics - Miscellaneous Components industry is experiencing significant growth due to the ongoing automation drive and increased spending by manufacturers in sectors such as semiconductors, automobiles, machinery, and mobile phones. Companies like nVent Electric (NVT), Forgent Power Solutions (FPS), and Vicor (VICR) are well-positioned to benefit from the widespread adoption of AI and the democratization of IoT. These technological advancements are transforming various fields, including robotics, industrial automation, transportation systems, retail, and healthcare.

However, the industry faces several challenges, including a difficult global macroeconomic environment, end-market volatility, and higher tariffs. Export restrictions imposed by both the United States and China are major headwinds. Additionally, growing geopolitical tensions and foreign currency fluctuations are impacting industry players.

Industry Description

The Zacks Electronics - Miscellaneous Components industry primarily consists of companies that provide various accessories and parts used in electronic products. These companies offer power control and sensor technologies to prevent equipment damage, testing products for safety, and advanced medical solutions. They serve a wide range of end markets, including telecommunications, automotive electronics, medical devices, industrial, transportation, energy harvesting, defense and aerospace electronic systems, and consumer electronics. The primary customers in this industry are original equipment manufacturers, independent electronic component distributors, and electronic manufacturing service providers.

3 Trends Shaping the Future of the Electronics - Miscellaneous Components Industry

Automation Boom a Tailwind

The demand for faster, more powerful, and energy-efficient electronics is driving increased automation. Control systems, such as computers, robots, and information technologies for handling different processes and machinery, are fueling the industry. The growing installation of collaborative robots, which enhance production efficiency by working alongside human workers, is benefiting industry participants. IoT-supported factory automation solutions are also contributing factors. The evolution of smart cars and autonomous vehicles is expected to further 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, which enables 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 use of new manufacturing materials to boost transistor and bit density are driving the demand for solutions provided by industry players.

Geopolitical Tensions Are Worrisome

Tariffs and the deteriorating relationship between the United States and China are headwinds for the industry. Increasing dependency on AI-backed electronic devices on semiconductors and current U.S. restrictions 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 part of the broader Zacks Computer and Technology sector. It carries a Zacks Industry Rank #60, placing it in the top 24% of more than 250 Zacks industries. The group’s Zacks Industry Rank, which is the average of the Zacks Rank of all member stocks, indicates bullish near-term prospects. Research shows that the top 50% of Zacks-ranked industries outperform the bottom 50% by a factor of more than two to one.

Given the bullish outlook, there are several stocks investors can consider for a healthy portfolio. Before presenting the stocks, let's examine the industry's recent stock-market performance and 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 over the past year. The industry has appreciated 0.7% over this period compared to 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) ratio, 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, as shown 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.

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