Is it too late to buy CommScope stock after 80% rally on Amphenol deal?

CommScope Holding Company Inc (NASDAQ: COMM) soared as much as 80% on Monday after announcing a $10.5 billion agreement with Amphenol Corp (NYSE: APH).  

In a press release this morning, the Claremount-headquartered firm said Amphenol has agreed to buy its “Connectivity and Cable Solutions (CCS) business in an all-cash deal expected to close in the first half of 2026.

Investors cheered the announcement, viewing it as a lifeline for COMM that’s been shedding assets to manage its debt load this year.

Alongside CommScope stock, Amphenol shares experienced a modest bump today as well – reflecting optimism about the strategic fit of the acquisition.  

Why is Amphenol paying billions for CommScope’s unit?

Amphenol spending billions on the seller’s CCS unit reflects more than optimism; it’s a calculated bet on the future of data infrastructure.

Connectivity and Cable Solutions business brings in roughly $3.6 billion in annual revenue and boasts EBITDA margins new 26%, making it a high-performing asset in rapidly expanding market.

With artificial intelligence (AI) driving demand for data center capacity, fiber-optic interconnect solutions have become critical.

According to Adam Norwitt, the chief executive of Amphenol, the aforementioned segment is “highly complementary” to their existing portfolio, especially in the IT datacom space.

Moreover, the acquisition also deepens APH’s reach into industrial and communications markets, positioning it to benefit from long-term infrastructure upgrades.

Including today’s cosmic run, COMM shares are up some 350% versus their year-to-date low in late April.

Is there any further upside left in CommScope stock?

For retail investors eyeing CommScope stock after the surge, the window may have already closed.

The explosive move this morning reflects that markets have already priced in the acquisition related premium.

Unless another bidder emerges, or the deal terms change, it’s reasonable to assume that further upside is rather limited for now.

CommScope’s remaining businesses, while leaner, don’t carry the same growth narrative as the divested CCS unit.

Moreover, the deal is expected to return cash to shareholders, not necessarily drive future earnings growth. Buying now means paying top dollar for a company that’s just sold its crown jewel.

Simply put, the risk-reward balance in COMM shares has actually shifted unfavorably.

Plus, the tech stock doesn’t currently pay a dividend to making it any more attractive to own despite the above-mentioned concerns either.

Amphenol deal is not a reason to buy COMM shares

CommScope’s decision to divest its CCS unit marks a strategic pivot toward debt reduction and operational focus.

While the deal unlocks shareholder value in the short term, it also strips the company of its most lucrative division.

That's why Wall Street currently rates CommScope shares are "underweight," only with an average price target of less than $6.0, warning of a more than 50% downside from here.

Investors who held COMM stock before the announcement have already reaped the benefits.

For newcomers, the upside is likely capped unless CommScope reinvents itself or surprises the market with new growth initiatives.