TTM Technologies (NASDAQ:TTMI) crossed $1 billion in quarterly sales for the first time on its August 5 earnings call, and the number came with real momentum behind it. Revenue jumped 37% year-over-year while non-GAAP earnings per share climbed 71% to $0.99, both all-time highs for the printed circuit board maker. The obvious question is whether a business this dependent on two red-hot end markets can keep compounding at this pace, or whether that concentration is itself the risk.
Bull Case: AI And Defense Are Doing The Heavy Lifting
Data center and networking sales made up 40% of second quarter 2026 revenue and grew 91% year over year, fueled by customers building out AI data centers. TTM is now in the early stage of ramping production on its N+M asymmetrical interconnect boards, and management expects the total data center and networking segment to account for 49% of net sales in the third quarter of 2026, with the company projecting this segment to more than double for the full year. A new Ultra-HDI ramp at the company’s Syracuse facility begins in the third quarter, continuing through 2027 on the way to full capacity in 2028.
Aerospace and defense grew 14% year-over-year and carried a 1.3 book-to-bill, pushing program backlog to $1.7 billion, up from $1.5 billion a year earlier, with more than $7 billion in qualified pipeline tied to programs like Golden Dome and the APS-153 radar system. Medical, industrial and instrumentation sales grew 33%, helped by continuous glucose monitoring products and AI-driven test equipment, with the top five medical customers more than doubling internal expectations. Company-wide book-to-bill hit 1.49, and 90-day backlog rose 81% to $901 million. Two pending European acquisitions, Swiss Technology Group AG and ILFA GmbH, are set to close in the third quarter and give TTM its first European footprint in medical and defense.
Bear Case: Automotive And Currency Swings Cloud The Picture
Automotive sales slipped marginally in the second quarter and are guided to shrink further to about 6% of third-quarter sales as material suppliers shift away from lower-complexity products TTM relies on, with the full year now expected to decline in the mid-single digits. The pending Swiss acquisition also created a noncash headache: a $14 million unrealized loss on a currency swap used to hedge the deal’s Swiss franc price tag, since hedge accounting wasn’t available before the transaction closes. Realized foreign exchange costs widened too, to a $4.7 million net expense from $1.6 million a year earlier, as a weaker dollar drove a $4.9 million FX loss versus $1.4 million previously. Operating cash flow also came in slightly below last year’s second quarter despite the much larger revenue base, a reminder that fast growth can still strain working capital. And with 80% of sales now tied to just two megatrends, AI and defense, any slowdown in either one carries outsized weight.
What The Smart Money Is Doing
Hedge fund ownership climbed from 54 funds to 64 in the most recent quarter, pointing to institutions building conviction rather than trimming. Short interest sits at just 3.22% of the float, a level that signals little organized skepticism toward the stock. Rising institutional ownership paired with light short interest suggests the market is leaning into the growth story.
The Tension Investors Should Watch
TTM Technologies heads into the third quarter of 2026 guiding for $1.10 billion to $1.14 billion in sales, with full-year 2026 revenue now expected near $4.4 billion, both above where the year started. Nearly all of that growth traces back to two megatrends, AI infrastructure and defense spending, which together make up 80% of net sales. The $1.7 billion defense backlog and the swelling data center pipeline suggest that concentration is currently paying off handsomely. Automotive’s slide and the currency losses tied to the pending European deals show what the other side of that same concentration can look like.
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