Start here if you're new
what it is
Arrow is the middleman that gets chips, servers, and tech gear from manufacturers to thousands of business customers worldwide.
how it gets paid
Last year Arrow Elec made $30.9B in revenue. semiconductor components was the main engine at $14.8B, or 48% of sales.
why it's growing
Revenue grew 10.5% last year. It’s been a while since the company’s semiconductor and electronic components distribution business boomed after economies reopened to pent-up demand for microchips in 2021.
what just happened
Arrow's last quarter beat by 23.31%, with EPS of $4.39 versus the $3.56 estimate.
At a glance
B++ balance sheet — above average — nothing keeping you up at night
55/100 earnings predictability — expect surprises
12.7x trailing p/e — the market's not buying it — or you found a deal
10.5% return on capital — nothing to write home about
xvary composite: 68/100 — average
What they do
Arrow is the middleman that gets chips, servers, and tech gear from manufacturers to thousands of business customers worldwide.
Arrow wins because it sits in the middle of a messy supply chain with over 180 selling locations and 39 distribution centers across more than 85 countries. Distribution → moving other people's products → your customer stays because switching vendors risks delays, redesigns, and lost production time. That reach helped Arrow generate $30.9 billion in revenue, with 70% from semiconductor products and 30% from computer products.
How they make money
$30.9B
annual revenue · their business grew +10.5% last year
semiconductor components
$14.8B
interconnect, passive and electromechanical
$6.8B
enterprise computing
$5.7B
cloud, security and infrastructure software
$2.7B
engineering and lifecycle services
$0.9B
The products that matter
component distribution
Global Components
$21.6B · 70% of sales
it is roughly 70% of the $30.9B business, or about $21.6B in sales. if industrial, data center, and embedded demand improves, this is where the recovery shows up first.
core engine
regional distribution
Americas
$11.1B · 36% of sales
this region contributes $11.1B, or 36% of total sales. for you as a shareholder, it is the largest geographic revenue bucket on the page.
largest region
regional distribution
Europe
$10.8B · 35% of sales
europe adds another $10.8B, or 35% of sales. that near-match with the americas tells you Arrow is globally spread, not dependent on one region.
second pillar
Key numbers
12.7x
trailing p/e
Trailing P/E → price versus past earnings → so what: you are paying 12.7 times last year's profit for a business projected to grow earnings 12.5% a year.
10.5%
return on capital
Return on capital → profit earned on money invested in the business → so what: Arrow is decent, but not magical, at turning capital into earnings.
4.3%
operating margin
Operating margin → profit before interest and taxes on each sales dollar → so what: this is a scale business, not a luxury one.
$3.1B
long-term debt
Debt equals 30% of capital, which is manageable, but it matters more when your net margin is only 2.6%.
Financial health
B++
strength
- balance sheet grade B++ — above average financial health
- risk rank 3 — safer than 50% of stocks
- price stability 70 / 100
- long-term debt $3.1B (30% of capital)
- net profit margin 2.6% — keeps 3 cents of every dollar in revenue
- return on equity 13% — $0.13 profit for every $1 investors have put in
B++ — functional but not a standout on the balance sheet.
Total return vs. market
You invested $10,000 in ARW 3 years ago → it's now worth $11,950.
The index would have given you $14,540.
source: institutional data · total return
What just happened
beat estimates
Arrow's last quarter beat by 23.31%, with EPS of $4.39 versus the $3.56 estimate.
The beat lines up with the view that the chip downturn bottomed in late 2024. Revenue was reported at $22.1B and gross margin was 11.1%, which tells you volume came back faster than the market expected.
$22.1B
revenue
$7.19
eps
11.1%
gross margin
the number that mattered
The key number was the 23.31% earnings beat, because this stock trades on whether the cycle is recovering or still faking it.
-
arrow electronics’ profit cycle appears to have finally turned up.it’s been a while since the company’s semiconductor and electronic components distribution business boomed after economies reopened to pent-up demand for microchips in 2021.
-
arrow benefited from record chip pricing from the markups received in its middleman role between component producers and consumers.
-
the good times faded in 2023 and accelerated to the downside in 2024.
-
last year, particularly the back half, now looks like the bottom of the chip cycle.conditions have been good all along for advanced semiconductors used in the data center market and certain chips used in aerospace and defense, but the overall sector was weak and only recently began to improve in what leadership is calling a gradual recovery.
-
we’re looking for good bottom-line gains this year and next.
source: company earnings report, 2026
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What could go wrong
the #1 risk is export controls and semiconductor trade restrictions.
med
export controls can squeeze the core business
Arrow sits between chip suppliers and customers. new restrictions can limit what moves across borders, delay fulfillment, and raise compliance costs.
impact: this pressure runs straight through the $21.6B Global Components business and, by extension, the wider $30.9B revenue base.
med
thin margins leave almost no cushion
the company reported a 1.9% quarterly margin, a 2.1% net margin, and a 3.7% operating margin. that is not much room for pricing mistakes, inventory markdowns, or slower turns.
impact: small execution misses matter fast when you only keep a few cents per dollar of sales.
med
the chip cycle can fake you out
full-year revenue growth of 10.5% looks better than the 55/100 earnings predictability score. that gap tells you volume can recover before earnings quality does.
impact: if customers destock again, the recovery thesis becomes a timing story instead of a compounding story.
med
debt is manageable until the cycle rolls over
long-term debt is $3.1B, or 30% of capital. that is workable in a stable environment and less comfortable in a drawn-out downturn.
impact: weaker demand would pressure cash generation at the same time the balance sheet needs to stay flexible.
the common thread is simple: Arrow depends on uninterrupted product flow and steady spreads, yet it only keeps 2.1% of revenue as profit. that makes this a low-buffer business.
source: institutional data · regulatory filings · risk analysis
Pay attention to
trend
margin needs to move above 1.9%
revenue is already recovering. the real tell is whether quarterly margin starts expanding from the recent 1.9% level.
metric
watch the path to $13.30 EPS
that is the current fy2026 estimate. if the business hits it, the stock is trading at about 10.5x forward earnings. if it misses, the cheapness story weakens fast.
risk
track export rules and inventory behavior
trade restrictions can disrupt supply, and inventory corrections can hit volumes before the income statement fully catches up.
calendar
next earnings need better mix, not just more boxes moved
listen for commentary on data center, aerospace, and defense demand, plus any sign that the broader recovery is widening beyond those pockets.
Analyst rankings
short-term outlook
top 20%
momentum score 2 — analysts expect above-average price performance in the year ahead. in human-speak, they like the setup more than the long-range target midpoint suggests.
risk profile
average
stability score 3 — neither especially safe nor especially wild. you are taking business-cycle risk, not biotech-style binary risk.
chart momentum
average
technical score 3 — the stock is not sending a dramatic message either way. the fundamental turn matters more here than the chart.
earnings predictability
55 / 100
earnings are only moderately predictable. translation: one or two quarters can change the narrative quickly because margins are thin and the cycle still matters.
source: institutional data
Institutional activity
institutions have been net selling for 2 consecutive quarters — 139 buyers vs. 204 sellers in 4q2025. total institutional holdings: 55.2M shares. net selling for 2 quarters.
source: institutional data
Price targets
3-5 year target range
$76
$177
$140
current price
$127
target midpoint · 9% from current · 3-5yr high: $250 (+80% · 16% ann'l return)
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