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Buy These 2 AI-Powered EMS Stocks With Double-Digit Short-Term Upside
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Key Takeaways
Celestica is expanding in AI infrastructure with strong growth in cloud and connectivity segments.
Celestica 2025 EPS estimates rose 9.5% in 30 days, with revenues projected to grow 20.6% year over year.
Jabil is investing $500M in AI data center manufacturing, boosting its hardware supply chain presence.
The electronics manufacturing services (EMS) space primarily consists of companies that provide design, engineering and manufacturing services to electronics original equipment manufacturers (OEMs). The Zacks defined Electronics - Manufacturing Services industry is currently in the top 4% of the Zacks Industry Rank.
In the past year, the industry has provided an astonishing 102.8% return, while its year-to-date return is an impressive 48.7%. Since it is ranked in the top half of the Zacks Ranked Industries, we expect the consulting services industry to outperform the market over the next three to six months.
Here we recommend two global EMS leaders that are strategically positioned in the EMS landscape and have the ability to cater to the evolving AI (artificial intelligence) demands of business enterprises. These two companies are: Celestica Inc. (CLS - Free Report) and Jabil Inc. (JBL - Free Report) . Each of our picks carries either a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The chart below shows the price performance of our two picks in the past three months.
Image Source: Zacks Investment Research
Celestica Inc.
Zacks Rank #1 Celestica is one of the largest electronics manufacturing services companies in the world, serving OEMs, cloud-based and other service providers, and business enterprises across several industries. CLS offers a comprehensive range of manufacturing and supply-chain solutions that support various customer requirements, from low-volume, high-complexity custom products to high-volume commodity products.
Growing Footprints in High-Value Markets
Celestica is benefiting from healthy demand trends in the Connectivity & Cloud Solutions (CCS) segment. The growth is primarily backed by CLS’ strength in Hyperscaler Portfolio Solutions (HPS) networking business and optical programs, especially increasing demand for 800G and 400G network switches.
CLS has established itself as a dominant player in the rapidly expanding AI infrastructure market. Per Grandview Research, the AI infrastructure market is projected to reach $223.45 billion by 2030 with a compound annual growth rate of 30.4% from 2024 to 2030. Celestica is rapidly expanding its portfolio offering to capitalize on this market trend.
The growing proliferation of AI-based applications and generative AI tools is fueling solid AI investments across the technology ecosystem. This, in turn, is driving demand for CLS’ enterprise-level data communications and information processing infrastructure products, such as routers, switches, data center interconnects, edge solutions and servers and storage-related products.
Excellent Estimate Revisions for CLS Stock
For 2025, the Zacks Consensus Estimate currently shows revenues of $11.63 billion, suggesting an improvement of 20.6% year over year and earnings per share of $5.55, indicating an increase of 43% year over year. The Zacks Consensus Estimate for current-year earnings has improved 9.5% over the last 30 days.
For 2026, the Zacks Consensus Estimate currently shows revenues of $13.62 billion, suggesting an improvement of 17.1% year over year and earnings per share of $6.74, indicating an increase of 21.5% year over year. The Zacks Consensus Estimate for current-year earnings has improved 11% over the last 30 days.
Impressive Short-Term Price Upside for CLS Shares
The short-term average price target of brokerage firms for the stock represents an increase of 13.3% from the last closing price of $181.34. The brokerage target price is currently in the range of $120-$245. This indicates a maximum upside of 35.1% and a downside of 33.8%.
Jabil Inc.
Zacks Rank #2 Jabil is one of the largest global suppliers of EMS solutions. JBL offers electronics design, production, product management and after-market services to customers in more than a dozen industry verticals.
JBL has been benefiting immensely from healthy momentum in capital equipment, AI-powered data center infrastructure, cloud, and digital commerce business verticals. Its focus on end-market and product diversification is a key catalyst. Jabil’s target that “no product or product family should be greater than 5% operating income or cash flows in any fiscal year” is commendable.
Effective Product Diversifications
With a presence across 100 locations in 30 countries, Jabil is likely to gain from secular growth drivers with strong margins and cash flow dynamics. Moreover, its focus on end-market and product diversification is a key catalyst. JBL’s top-line is expected to benefit from strength in AI data center infrastructure, capital equipment and warehouse automation markets.
JBL is set to invest $500 million over the next several years to expand its manufacturing capabilities for the AI data center vertical. This will significantly boost the company’s position in the AI hardware supply chain. JBL’s unmatched end-market experience, technical and design capabilities, manufacturing know-how, supply chain insights and global product management expertise have put it in good standing.
Massive application of generative AI is set to drastically increase the efficiency of JBL’s automated optical inspection machines for the automation industry. A large-scale portfolio of business sectors offers JBL a high degree of resiliency during times of macroeconomic and geopolitical disruption.
An extensive global footprint is further strengthened by a centralized procurement process, which, coupled with a single Enterprise Resource Planning system, aids customers with end-to-end supply-chain visibility. A worldwide connected factory network enables JBL to scale up production per the evolving market dynamics.
Management’s focus on improving working capital management and integration of sophisticated AI and ML (machine learning) capabilities to enhance the efficiency of its internal processes is a major tailwind.
Positive Estimate Revisions for JBL Stock
For fiscal 2026 (ending August 2026), the Zacks Consensus Estimate currently shows revenues of $30.93 billion, suggesting an improvement of 6.1% year over year and earnings per share of $11.05, indicating an increase of 17.8% year over year. The Zacks Consensus Estimate for current-year earnings has improved 8.7% over the last 90 days.
Attractive Short-Term Price Upside for JBL Shares
The short-term average price target of brokerage firms for the stock represents an increase of 14.5% from the last closing price of $204.05. The brokerage target price is currently in the range of $208-$256. This indicates a maximum upside of 24.9% and no downside, reflecting a robust risk-reward ratio.
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Buy These 2 AI-Powered EMS Stocks With Double-Digit Short-Term Upside
Key Takeaways
The electronics manufacturing services (EMS) space primarily consists of companies that provide design, engineering and manufacturing services to electronics original equipment manufacturers (OEMs). The Zacks defined Electronics - Manufacturing Services industry is currently in the top 4% of the Zacks Industry Rank.
In the past year, the industry has provided an astonishing 102.8% return, while its year-to-date return is an impressive 48.7%. Since it is ranked in the top half of the Zacks Ranked Industries, we expect the consulting services industry to outperform the market over the next three to six months.
Here we recommend two global EMS leaders that are strategically positioned in the EMS landscape and have the ability to cater to the evolving AI (artificial intelligence) demands of business enterprises. These two companies are: Celestica Inc. (CLS - Free Report) and Jabil Inc. (JBL - Free Report) . Each of our picks carries either a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The chart below shows the price performance of our two picks in the past three months.
Image Source: Zacks Investment Research
Celestica Inc.
Zacks Rank #1 Celestica is one of the largest electronics manufacturing services companies in the world, serving OEMs, cloud-based and other service providers, and business enterprises across several industries. CLS offers a comprehensive range of manufacturing and supply-chain solutions that support various customer requirements, from low-volume, high-complexity custom products to high-volume commodity products.
Growing Footprints in High-Value Markets
Celestica is benefiting from healthy demand trends in the Connectivity & Cloud Solutions (CCS) segment. The growth is primarily backed by CLS’ strength in Hyperscaler Portfolio Solutions (HPS) networking business and optical programs, especially increasing demand for 800G and 400G network switches.
CLS has established itself as a dominant player in the rapidly expanding AI infrastructure market. Per Grandview Research, the AI infrastructure market is projected to reach $223.45 billion by 2030 with a compound annual growth rate of 30.4% from 2024 to 2030. Celestica is rapidly expanding its portfolio offering to capitalize on this market trend.
The growing proliferation of AI-based applications and generative AI tools is fueling solid AI investments across the technology ecosystem. This, in turn, is driving demand for CLS’ enterprise-level data communications and information processing infrastructure products, such as routers, switches, data center interconnects, edge solutions and servers and storage-related products.
Excellent Estimate Revisions for CLS Stock
For 2025, the Zacks Consensus Estimate currently shows revenues of $11.63 billion, suggesting an improvement of 20.6% year over year and earnings per share of $5.55, indicating an increase of 43% year over year. The Zacks Consensus Estimate for current-year earnings has improved 9.5% over the last 30 days.
For 2026, the Zacks Consensus Estimate currently shows revenues of $13.62 billion, suggesting an improvement of 17.1% year over year and earnings per share of $6.74, indicating an increase of 21.5% year over year. The Zacks Consensus Estimate for current-year earnings has improved 11% over the last 30 days.
Impressive Short-Term Price Upside for CLS Shares
The short-term average price target of brokerage firms for the stock represents an increase of 13.3% from the last closing price of $181.34. The brokerage target price is currently in the range of $120-$245. This indicates a maximum upside of 35.1% and a downside of 33.8%.
Jabil Inc.
Zacks Rank #2 Jabil is one of the largest global suppliers of EMS solutions. JBL offers electronics design, production, product management and after-market services to customers in more than a dozen industry verticals.
JBL has been benefiting immensely from healthy momentum in capital equipment, AI-powered data center infrastructure, cloud, and digital commerce business verticals. Its focus on end-market and product diversification is a key catalyst. Jabil’s target that “no product or product family should be greater than 5% operating income or cash flows in any fiscal year” is commendable.
Effective Product Diversifications
With a presence across 100 locations in 30 countries, Jabil is likely to gain from secular growth drivers with strong margins and cash flow dynamics. Moreover, its focus on end-market and product diversification is a key catalyst. JBL’s top-line is expected to benefit from strength in AI data center infrastructure, capital equipment and warehouse automation markets.
JBL is set to invest $500 million over the next several years to expand its manufacturing capabilities for the AI data center vertical. This will significantly boost the company’s position in the AI hardware supply chain. JBL’s unmatched end-market experience, technical and design capabilities, manufacturing know-how, supply chain insights and global product management expertise have put it in good standing.
Massive application of generative AI is set to drastically increase the efficiency of JBL’s automated optical inspection machines for the automation industry. A large-scale portfolio of business sectors offers JBL a high degree of resiliency during times of macroeconomic and geopolitical disruption.
An extensive global footprint is further strengthened by a centralized procurement process, which, coupled with a single Enterprise Resource Planning system, aids customers with end-to-end supply-chain visibility. A worldwide connected factory network enables JBL to scale up production per the evolving market dynamics.
Management’s focus on improving working capital management and integration of sophisticated AI and ML (machine learning) capabilities to enhance the efficiency of its internal processes is a major tailwind.
Positive Estimate Revisions for JBL Stock
For fiscal 2026 (ending August 2026), the Zacks Consensus Estimate currently shows revenues of $30.93 billion, suggesting an improvement of 6.1% year over year and earnings per share of $11.05, indicating an increase of 17.8% year over year. The Zacks Consensus Estimate for current-year earnings has improved 8.7% over the last 90 days.
Attractive Short-Term Price Upside for JBL Shares
The short-term average price target of brokerage firms for the stock represents an increase of 14.5% from the last closing price of $204.05. The brokerage target price is currently in the range of $208-$256. This indicates a maximum upside of 24.9% and no downside, reflecting a robust risk-reward ratio.