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Jabil Rises 36.2% Year to Date: Should You Buy the Stock?
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Key Takeaways
Jabil's AI-related revenues are expected to reach $13.6 billion in FY2026, up from $9 billion in FY2025.
Manufacturing capacity additions in North Carolina, Memphis and India support rising AI-related demand.
Jabil faces risks from supply chain issues, customer concentration and growing competition.
Jabil, Inc. (JBL - Free Report) has gained 36.2% year to date compared with the Electronic Manufacturing Services industry’s growth of 23.6%. It has outperformed the Zacks Computer & Technology sector and the S&P 500’s growth during this period.
Image Source: Zacks Investment Research
Among its competitors, the company has underperformed Flex Ltd. (FLEX - Free Report) but outperformed Celestica, Inc. (CLS - Free Report) . Celestica has increased 5.7%, while Flex has gained 81.2%.
JBL Rides Solid AI Traction, Diverse Portfolio
AI is driving a structural transformation across the technology sector. This is not a short-term change. Companies across industries are accelerating AI adoption to streamline workflows, improve productivity and strengthen their competitive positioning. This surge in AI deployment is prompting hyperscalers like Amazon, Microsoft and Google to significantly ramp up investments in data-center capacity. Jabil’s strongest growth opportunity is its expanding exposure to AI infrastructure. The company expects AI-related revenues of approximately $13.6 billion in fiscal 2026, up from $9 billion in fiscal 2025.
The company has developed capabilities spanning compute, storage, networking, optics, power, cooling and system integration. This is allowing customers to source more components from a single partner, reducing complexity for them. The company’s AI-related revenue base is expanding through steady customer additions. Jabil is expanding manufacturing capacity in locations including North Carolina, Memphis and India to support a surge in this AI-related demand.
The company’s growth is not only reliant on AI infrastructure investments. It is also benefiting from the increase in equipment spending needed to support evolution in semiconductor technology. Healthcare remains another major growth vertical. Jabil sees opportunities across areas such as drug delivery, medical devices, continuous glucose monitors, chronic disease management and pharma-related capabilities. The company is also witnessing improving conditions within renewable and energy infrastructure. Increasing power requirements associated with AI and data centers, and a shift in demand from residential toward commercial projects are driving demand in this vertical.
The company’s Connected Living and Digital Commerce operations are also witnessing improved customer additions. Growing opportunities in automation, robotics, retail and warehouse technology are a positive factor.
Supply Chain Issues, Competition and Volatility are Concerns
One of Jabil’s key challenges is ensuring adequate availability of critical components to support the rapid surge in demand. Management highlighted component availability as one of the factors that could influence the company’s fiscal 2027 performance. Jabil’s heavy reliance on a limited number of suppliers makes it vulnerable to supply chain disruptions.
Despite its diversified end-market exposure, Jabil remains dependent on a relatively limited number of customers. Changes in the spending plans, production requirements or financial condition of major customers could materially affect revenues. The risk is more prevalent because Jabil faces strong competition in the industry from other players such as Celestica and Flex.
Demand volatility in certain verticals such as automotive continues to impede top-line growth to some extent. The cyclical nature of the semiconductor market can also impact revenue growth.
Estimate Revision Trend
Earnings estimates for Jabil for 2026 and 2027 have remained unchanged over the past 60 days.
Image Source: Zacks Investment Research
Key Valuation Metric of JBL
From a valuation standpoint, JBL appears to be relatively premium than the industry but below its mean. Going by the price/earnings ratio, the company’s shares currently trade at 18.64 forward earnings, higher than 18.5 for the industry and above its mean of 21.64.
Image Source: Zacks Investment Research
End Note
Jabil’s growth story is increasingly being shaped by the rapid expansion of AI infrastructure spending. Its ability to provide integrated solutions, hyperscaler customer wins, and manufacturing capacity additions, along with a diverse portfolio, gives the company multiple avenues to generate revenue. However, Jabil's strong AI-driven growth does not come without risk. The company must manage component availability, customer concentration, growing competition and the timing of large-scale production ramps to ensure constant revenue generation in upcoming quarters. With a Zacks Rank #3 (Hold), Jabil appears to be navigating a balanced growth path, suggesting that investors may want to exercise caution before making investment decisions. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
View the Zacks #1 Rank List
Image: Bigstock
Jabil Rises 36.2% Year to Date: Should You Buy the Stock?
Key Takeaways
Jabil, Inc. (JBL - Free Report) has gained 36.2% year to date compared with the Electronic Manufacturing Services industry’s growth of 23.6%. It has outperformed the Zacks Computer & Technology sector and the S&P 500’s growth during this period.
Image Source: Zacks Investment Research
Among its competitors, the company has underperformed Flex Ltd. (FLEX - Free Report) but outperformed Celestica, Inc. (CLS - Free Report) . Celestica has increased 5.7%, while Flex has gained 81.2%.
JBL Rides Solid AI Traction, Diverse Portfolio
AI is driving a structural transformation across the technology sector. This is not a short-term change. Companies across industries are accelerating AI adoption to streamline workflows, improve productivity and strengthen their competitive positioning. This surge in AI deployment is prompting hyperscalers like Amazon, Microsoft and Google to significantly ramp up investments in data-center capacity. Jabil’s strongest growth opportunity is its expanding exposure to AI infrastructure. The company expects AI-related revenues of approximately $13.6 billion in fiscal 2026, up from $9 billion in fiscal 2025.
The company has developed capabilities spanning compute, storage, networking, optics, power, cooling and system integration. This is allowing customers to source more components from a single partner, reducing complexity for them. The company’s AI-related revenue base is expanding through steady customer additions. Jabil is expanding manufacturing capacity in locations including North Carolina, Memphis and India to support a surge in this AI-related demand.
The company’s growth is not only reliant on AI infrastructure investments. It is also benefiting from the increase in equipment spending needed to support evolution in semiconductor technology. Healthcare remains another major growth vertical. Jabil sees opportunities across areas such as drug delivery, medical devices, continuous glucose monitors, chronic disease management and pharma-related capabilities. The company is also witnessing improving conditions within renewable and energy infrastructure. Increasing power requirements associated with AI and data centers, and a shift in demand from residential toward commercial projects are driving demand in this vertical.
The company’s Connected Living and Digital Commerce operations are also witnessing improved customer additions. Growing opportunities in automation, robotics, retail and warehouse technology are a positive factor.
Supply Chain Issues, Competition and Volatility are Concerns
One of Jabil’s key challenges is ensuring adequate availability of critical components to support the rapid surge in demand. Management highlighted component availability as one of the factors that could influence the company’s fiscal 2027 performance. Jabil’s heavy reliance on a limited number of suppliers makes it vulnerable to supply chain disruptions.
Despite its diversified end-market exposure, Jabil remains dependent on a relatively limited number of customers. Changes in the spending plans, production requirements or financial condition of major customers could materially affect revenues. The risk is more prevalent because Jabil faces strong competition in the industry from other players such as Celestica and Flex.
Demand volatility in certain verticals such as automotive continues to impede top-line growth to some extent. The cyclical nature of the semiconductor market can also impact revenue growth.
Estimate Revision Trend
Earnings estimates for Jabil for 2026 and 2027 have remained unchanged over the past 60 days.
Image Source: Zacks Investment Research
Key Valuation Metric of JBL
From a valuation standpoint, JBL appears to be relatively premium than the industry but below its mean. Going by the price/earnings ratio, the company’s shares currently trade at 18.64 forward earnings, higher than 18.5 for the industry and above its mean of 21.64.
Image Source: Zacks Investment Research
End Note
Jabil’s growth story is increasingly being shaped by the rapid expansion of AI infrastructure spending. Its ability to provide integrated solutions, hyperscaler customer wins, and manufacturing capacity additions, along with a diverse portfolio, gives the company multiple avenues to generate revenue. However, Jabil's strong AI-driven growth does not come without risk. The company must manage component availability, customer concentration, growing competition and the timing of large-scale production ramps to ensure constant revenue generation in upcoming quarters. With a Zacks Rank #3 (Hold), Jabil appears to be navigating a balanced growth path, suggesting that investors may want to exercise caution before making investment decisions. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.