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Jabil Rides on AI Infrastructure Focus: Reason to Bet on the Stock?
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Key Takeaways
JBL is expanding manufacturing for AI servers, liquid cooling, silicon photonics and cloud infrastructure.
JBL announced a $500M U.S. manufacturing expansion to support rising AI data-center demand.
JBL and Intel are developing 800G silicon photonics optical modules for faster, reliable data transmission.
Jabil, Inc. (JBL - Free Report) is aggressively expanding manufacturing capabilities for AI servers, liquid cooling, silicon photonics and cloud infrastructure. The company is aiming to become a core infrastructure and smart-manufacturing partner for the AI economy and announced a $500 million U.S. manufacturing expansion to support AI data center demand.
Jabil's extensive manufacturing footprint and strong expertise position it as an ideal partner in the burgeoning AI/ML ecosystem. The company's commitment to providing unparalleled value to customers underscores its importance in the optical module space. The company’s 800G silicon photonics-based optical transceiver modules are designed to fuel the AI/ML revolution, delivering unparalleled performance and scalability through collaborations with industry giants.
Jabil has partnered with Intel Corporation (INTC - Free Report) to leverage the latter’s cutting-edge silicon photonics platform, renowned for its manufacturing efficiency and reliability. Coupled with Jabil's world-class manufacturing capabilities and Intel’s technology prowess, the partnership sets a new standard for speed, efficiency and reliability in data transmission. Intel's volume-proven silicon photonics platform, with on-chip laser sources fabricated, tested and burned-in at wafer scale, ensures unparalleled reliability and simplicity in module integration. With a focus on reliability, scalability and performance, the new 800G optical transceiver modules are poised to drive significant advancements in data-intensive applications.
End-Market Diversification Aids JBL
Jabil is benefiting from strength in telecommunications, healthcare, cloud, energy, automotive, retail and industrial end markets with an integrated portfolio and after-market services. The company is likely to gain from the rapid adoption of 5G wireless and cloud computing in the long run. Healthy demand trends, diligent execution of operational plans and skillful management of supply chain dynamics are tailwinds for the company.
Jabil’s focus on end-market and product diversification is a key catalyst. The company’s target that “no product or product family should be greater than 5% operating income or cash flows in any fiscal year” is commendable. The diversification increases the reliability of the company’s earnings and revenues, thereby driving long-term returns for investors.
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 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. Its 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. The company has recorded a healthy revenue growth over the years, barring an occasional blip.
Image Source: Zacks Investment Research
Price Performance
Jabil has gained 127% over the past year compared with the industry’s growth of 188.3%. It has lagged peers like Flex Ltd. (FLEX - Free Report) and Celestica Inc. (CLS - Free Report) over this period. While Flex has gained 245.7%, Celestica surged 314%.
One-Year JBL Stock Price Performance
Image Source: Zacks Investment Research
Estimate Revision
Earnings estimates for Jabil for fiscal 2026 and fiscal 2027 have moved up 20.9% to $12.30 and 19.6% to $14.35, respectively, over the past year. The positive estimate revision depicts bullish sentiments about the stock’s growth potential.
Image Source: Zacks Investment Research
End Note
Jabil is bullish on its long-term prospects. The company is well-positioned to capitalize on growth opportunities in areas such as AI data center hardware, power and energy infrastructure, software-defined electric and hybrid vehicles, and healthcare. Strong margins and robust free cash flow are likely to enable continued investment in profitable growth and capital returns to shareholders.
Management believes that the company's strategic direction and financial strength will allow it to navigate current challenges better and emerge stronger, with a focus on high-potential sectors for future growth.
The uptrend in estimate revisions further portrays positive sentiments about the stock’s growth potential. JBL has a long-term earnings growth expectation of 17.1% and delivered a trailing four-quarter average earnings surprise of 7.9%. It has a VGM Score of B. With a Zacks Rank #2 (Buy), Jabil appears primed for further stock price appreciation. Consequently, investors are likely to profit if they bet on this high-flying stock now. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Jabil Rides on AI Infrastructure Focus: Reason to Bet on the Stock?
Key Takeaways
Jabil, Inc. (JBL - Free Report) is aggressively expanding manufacturing capabilities for AI servers, liquid cooling, silicon photonics and cloud infrastructure. The company is aiming to become a core infrastructure and smart-manufacturing partner for the AI economy and announced a $500 million U.S. manufacturing expansion to support AI data center demand.
Jabil's extensive manufacturing footprint and strong expertise position it as an ideal partner in the burgeoning AI/ML ecosystem. The company's commitment to providing unparalleled value to customers underscores its importance in the optical module space. The company’s 800G silicon photonics-based optical transceiver modules are designed to fuel the AI/ML revolution, delivering unparalleled performance and scalability through collaborations with industry giants.
Jabil has partnered with Intel Corporation (INTC - Free Report) to leverage the latter’s cutting-edge silicon photonics platform, renowned for its manufacturing efficiency and reliability. Coupled with Jabil's world-class manufacturing capabilities and Intel’s technology prowess, the partnership sets a new standard for speed, efficiency and reliability in data transmission. Intel's volume-proven silicon photonics platform, with on-chip laser sources fabricated, tested and burned-in at wafer scale, ensures unparalleled reliability and simplicity in module integration. With a focus on reliability, scalability and performance, the new 800G optical transceiver modules are poised to drive significant advancements in data-intensive applications.
End-Market Diversification Aids JBL
Jabil is benefiting from strength in telecommunications, healthcare, cloud, energy, automotive, retail and industrial end markets with an integrated portfolio and after-market services. The company is likely to gain from the rapid adoption of 5G wireless and cloud computing in the long run. Healthy demand trends, diligent execution of operational plans and skillful management of supply chain dynamics are tailwinds for the company.
Jabil’s focus on end-market and product diversification is a key catalyst. The company’s target that “no product or product family should be greater than 5% operating income or cash flows in any fiscal year” is commendable. The diversification increases the reliability of the company’s earnings and revenues, thereby driving long-term returns for investors.
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 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. Its 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. The company has recorded a healthy revenue growth over the years, barring an occasional blip.
Image Source: Zacks Investment Research
Price Performance
Jabil has gained 127% over the past year compared with the industry’s growth of 188.3%. It has lagged peers like Flex Ltd. (FLEX - Free Report) and Celestica Inc. (CLS - Free Report) over this period. While Flex has gained 245.7%, Celestica surged 314%.
One-Year JBL Stock Price Performance
Image Source: Zacks Investment Research
Estimate Revision
Earnings estimates for Jabil for fiscal 2026 and fiscal 2027 have moved up 20.9% to $12.30 and 19.6% to $14.35, respectively, over the past year. The positive estimate revision depicts bullish sentiments about the stock’s growth potential.
Image Source: Zacks Investment Research
End Note
Jabil is bullish on its long-term prospects. The company is well-positioned to capitalize on growth opportunities in areas such as AI data center hardware, power and energy infrastructure, software-defined electric and hybrid vehicles, and healthcare. Strong margins and robust free cash flow are likely to enable continued investment in profitable growth and capital returns to shareholders.
Management believes that the company's strategic direction and financial strength will allow it to navigate current challenges better and emerge stronger, with a focus on high-potential sectors for future growth.
The uptrend in estimate revisions further portrays positive sentiments about the stock’s growth potential. JBL has a long-term earnings growth expectation of 17.1% and delivered a trailing four-quarter average earnings surprise of 7.9%. It has a VGM Score of B. With a Zacks Rank #2 (Buy), Jabil appears primed for further stock price appreciation. Consequently, investors are likely to profit if they bet on this high-flying stock now. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.