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Buy Q3 AI Data Center Laggards CAT, GLW, JBL for a Rebound in Q4
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Key Takeaways
Caterpillar is expanding power-generation capacity as AI-driven data center demand lifts engine orders.
Corning sees accelerating AI infrastructure demand driving optical connectivity growth and stronger guidance.
Jabil expects AI revenues to reach $22.1B in fiscal 2027, supported by capacity additions and diversification.
The artificial intelligence (AI) infrastructure trade has shifted from pure-play semiconductors to other AI-powered data center infrastructure. Despite this positive, a handful of AI data center infrastructure bigwigs posted negative returns in the last quarter.
We have selected three such stocks with a favorable Zacks Rank that are poised to witness a turnaround in fourth-quarter 2026 supported by their enriched product portfolio, business diversification, strong guidance and solid estimate revisions.
These three stocks are: Caterpillar Inc. (CAT - Free Report) , Corning Inc. (GLW - Free Report) and Jabil Inc. (JBL - Free Report) . Each of our picks currently 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 three picks in Q3 2026.
Image Source: Zacks Investment Research
Caterpillar Inc.
Zacks Rank #1 Caterpillar is gaining from rising AI data-center-related power demand. As big technology companies establish data centers globally to support their generative AI applications, CAT is witnessing robust order levels for reciprocating engines for data centers.
CAT expects full-year 2026 power generation growth in both reciprocating engines and Solar Turbines as cloud computing and generative AI support data-center build-outs. The company continues to add capacity against this multi-year opportunity.
CAT’s long-term plan calls for large reciprocating engine capacity nearly three times the 2024 levels and Power Generation sales more than three times the 2024 levels by 2030. It is also restarting a 10-megawatt gas reciprocating engine platform, adding about 1.5 gigawatts of capacity with shipments expected from fourth-quarter 2026.
Product Innovation
CAT is also extending its digital and AI capabilities through Cat AI Assistant, its expanded collaboration with NVIDIA Corp. (NVDA - Free Report) , RPMGlobal and Skycatch. These initiatives add software, spatial analytics and AI tools that can improve equipment interaction, mine planning and operating decisions.
Strong Guidance
Looking to third-quarter 2026, management expects strong growth in sales and revenues compared with the year-ago period. For 2026, CAT expects sales and revenues to grow in the mid-to-high teens. Adjusted operating margin is projected near the bottom of its target range, excluding tariff recoveries. Machinery, Power & Energy free cash flow is expected in the top half of the company’s target range.
Solid Estimate Revisions
Caterpillar has an expected revenue and earnings growth rate of 17.4% and 43.6%, respectively, for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 0.1% over the last 30 days.
CAT has an expected revenue and earnings growth rate of 10.9% and 20.5%, respectively, for the next year. The Zacks Consensus Estimate for next year’s earnings has improved 0.3% over the last 30 days.
Image Source: Zacks Investment Research
Robust Price Upside Potential
The short-term average price target of brokerage firms represents an increase of 19.4% from the last closing price of $845.42. The brokerage target price is currently in the range of $882-$1,225. This indicates a maximum upside of 44.9% and no downside.
Corning Inc.
Zacks Rank #2 Corning entered the second half of 2026 with its growth outlook tied to AI infrastructure and optical connectivity. Revenue growth was primarily led by Optical Communications and Solar segments. Enterprise Networks sales jumped supported by accelerating demand for generative AI infrastructure. Core operating margin also expanded as higher volumes and improved execution strengthened profitability.
GLW continues to strengthen its competitive position through innovation across optical connectivity, advanced glass and semiconductor applications. The company recently launched Gorilla Glass Ceramic 3 and continues to see opportunities for advanced optics products tied to AI-driven data center build-outs and semiconductor manufacturing demand. GLW is expanding its Generative AI optical portfolio with multicore fiber and high-density connectivity solutions that improve network capacity and reduce installation complexity.
AI and Optical Communications Momentum
Enterprise Networks drove the improvement as hyperscale customers expanded AI-related data center capacity. GLW announced multiyear agreements with Amazon.Com Inc. (AMZN - Free Report) and NVIDIA, supporting further demand for optical fiber, cable and connectivity products. The NVDA partnership plans to increase U.S. optical connectivity manufacturing capacity tenfold and expand domestic fiber production capacity by more than 50%.
Strong Guidance
For the third quarter, management expects core sales between $4.9 billion and $5 billion, representing approximately 16% year-over-year growth. Core earnings are projected between 85 cents and 89 cents per share, implying growth of roughly 28%.
Corning continues to target an annualized sales run rate of $20 billion by the end of 2026 under its upgraded Springboard Plan. The company also aims to reach $30 billion by the end of 2028 and $40 billion by the end of 2030, supported by AI infrastructure, solar expansion and deeper customer partnerships.
Solid Estimate Revisions
Corning has an expected revenue and earnings growth rate of 16% and 30.2%, respectively, for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 0.3% over the last 30 days.
GLW has an expected revenue and earnings growth rate of 18% and 30.7%, respectively, for the next year. The Zacks Consensus Estimate for next year’s earnings has improved 0.2% over the last seven days.
Image Source: Zacks Investment Research
Robust Price Upside Potential
The short-term average price target of brokerage firms represents an increase of 12.9% from the last closing price of $164.19. The brokerage target price is currently in the range of $129-$238. This indicates a maximum upside of 45% and a downside of 21.4%.
Jabil Inc.
Zacks Rank #2 Jabil is gaining from sustained strength in AI infrastructure demand, which continues to support growth across its Intelligent Infrastructure business. This growth is being driven by strong customer demand, disciplined execution and capabilities spanning compute, storage, networking, optics, power, cooling and rack-level integration.
Future growth of JBL will come from growing AI infrastructure and will be backed by capacity additions, broader customer relationships and improving demand across several non-AI markets. AI-related demand continues to accelerate, supported by cloud infrastructure, networking, power, cooling and semiconductor equipment. JBL expects six Intelligent Infrastructure customers to each generate more than $1 billion in fiscal 2027.
Diversification Strategy
JBL’s focus on end-market and product diversification remains a key long-term catalyst. Management continues to target a balanced portfolio so that no individual product or product family becomes an outsized contributor to operating income or cash flow.
This strategy improves the stability of earnings through industry cycles while allowing the company to capture opportunities across AI infrastructure, healthcare, industrial and automation markets. Better-than-expected performance in automotive and connected living further demonstrates the benefits of this diversified operating model.
Strong Guidance
For the third quarter, management expects net revenue between $10.6 billion and $11.4 billion, operating income between $481 million and $541 million, earnings per share (EPS) between $2.78 to $3.18 and adjusted EPS between $3.80 to $4.20.
JBL expects fiscal 2027 revenues of about $44.5B, up 24% annually, with core EPS projected at $17.55. AI-related revenues are expected to reach about $22.1B in fiscal 2027, representing 54% annual growth.
Solid Estimate Revisions
Jabil has an expected revenue and earnings growth rate of 24.10% and 29.4%, respectively, for the current year (ending August 2027). The Zacks Consensus Estimate for the current year’s earnings has improved 1.6% over the last seven days.
JBL has an expected revenue and earnings growth rate of 14.2% and 28.2%, respectively, for the next year. The Zacks Consensus Estimate for next year’s earnings has improved 3.3% over the last seven days.
Image Source: Zacks Investment Research
Robust Price Upside Potential
The short-term average price target of brokerage firms represents an increase of 44.1% from the last closing price of $304.41. The brokerage target price is currently in the range of $378-$475. This indicates a maximum upside of 56% and no downside.
View the Zacks #1 Rank List
Image: Shutterstock
Buy Q3 AI Data Center Laggards CAT, GLW, JBL for a Rebound in Q4
Key Takeaways
The artificial intelligence (AI) infrastructure trade has shifted from pure-play semiconductors to other AI-powered data center infrastructure. Despite this positive, a handful of AI data center infrastructure bigwigs posted negative returns in the last quarter.
We have selected three such stocks with a favorable Zacks Rank that are poised to witness a turnaround in fourth-quarter 2026 supported by their enriched product portfolio, business diversification, strong guidance and solid estimate revisions.
These three stocks are: Caterpillar Inc. (CAT - Free Report) , Corning Inc. (GLW - Free Report) and Jabil Inc. (JBL - Free Report) . Each of our picks currently 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 three picks in Q3 2026.
Image Source: Zacks Investment Research
Caterpillar Inc.
Zacks Rank #1 Caterpillar is gaining from rising AI data-center-related power demand. As big technology companies establish data centers globally to support their generative AI applications, CAT is witnessing robust order levels for reciprocating engines for data centers.
CAT expects full-year 2026 power generation growth in both reciprocating engines and Solar Turbines as cloud computing and generative AI support data-center build-outs. The company continues to add capacity against this multi-year opportunity.
CAT’s long-term plan calls for large reciprocating engine capacity nearly three times the 2024 levels and Power Generation sales more than three times the 2024 levels by 2030. It is also restarting a 10-megawatt gas reciprocating engine platform, adding about 1.5 gigawatts of capacity with shipments expected from fourth-quarter 2026.
Product Innovation
CAT is also extending its digital and AI capabilities through Cat AI Assistant, its expanded collaboration with NVIDIA Corp. (NVDA - Free Report) , RPMGlobal and Skycatch. These initiatives add software, spatial analytics and AI tools that can improve equipment interaction, mine planning and operating decisions.
Strong Guidance
Looking to third-quarter 2026, management expects strong growth in sales and revenues compared with the year-ago period. For 2026, CAT expects sales and revenues to grow in the mid-to-high teens. Adjusted operating margin is projected near the bottom of its target range, excluding tariff recoveries. Machinery, Power & Energy free cash flow is expected in the top half of the company’s target range.
Solid Estimate Revisions
Caterpillar has an expected revenue and earnings growth rate of 17.4% and 43.6%, respectively, for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 0.1% over the last 30 days.
CAT has an expected revenue and earnings growth rate of 10.9% and 20.5%, respectively, for the next year. The Zacks Consensus Estimate for next year’s earnings has improved 0.3% over the last 30 days.
Image Source: Zacks Investment Research
Robust Price Upside Potential
The short-term average price target of brokerage firms represents an increase of 19.4% from the last closing price of $845.42. The brokerage target price is currently in the range of $882-$1,225. This indicates a maximum upside of 44.9% and no downside.
Corning Inc.
Zacks Rank #2 Corning entered the second half of 2026 with its growth outlook tied to AI infrastructure and optical connectivity. Revenue growth was primarily led by Optical Communications and Solar segments. Enterprise Networks sales jumped supported by accelerating demand for generative AI infrastructure. Core operating margin also expanded as higher volumes and improved execution strengthened profitability.
GLW continues to strengthen its competitive position through innovation across optical connectivity, advanced glass and semiconductor applications. The company recently launched Gorilla Glass Ceramic 3 and continues to see opportunities for advanced optics products tied to AI-driven data center build-outs and semiconductor manufacturing demand. GLW is expanding its Generative AI optical portfolio with multicore fiber and high-density connectivity solutions that improve network capacity and reduce installation complexity.
AI and Optical Communications Momentum
Enterprise Networks drove the improvement as hyperscale customers expanded AI-related data center capacity. GLW announced multiyear agreements with Amazon.Com Inc. (AMZN - Free Report) and NVIDIA, supporting further demand for optical fiber, cable and connectivity products. The NVDA partnership plans to increase U.S. optical connectivity manufacturing capacity tenfold and expand domestic fiber production capacity by more than 50%.
Strong Guidance
For the third quarter, management expects core sales between $4.9 billion and $5 billion, representing approximately 16% year-over-year growth. Core earnings are projected between 85 cents and 89 cents per share, implying growth of roughly 28%.
Corning continues to target an annualized sales run rate of $20 billion by the end of 2026 under its upgraded Springboard Plan. The company also aims to reach $30 billion by the end of 2028 and $40 billion by the end of 2030, supported by AI infrastructure, solar expansion and deeper customer partnerships.
Solid Estimate Revisions
Corning has an expected revenue and earnings growth rate of 16% and 30.2%, respectively, for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 0.3% over the last 30 days.
GLW has an expected revenue and earnings growth rate of 18% and 30.7%, respectively, for the next year. The Zacks Consensus Estimate for next year’s earnings has improved 0.2% over the last seven days.
Image Source: Zacks Investment Research
Robust Price Upside Potential
The short-term average price target of brokerage firms represents an increase of 12.9% from the last closing price of $164.19. The brokerage target price is currently in the range of $129-$238. This indicates a maximum upside of 45% and a downside of 21.4%.
Jabil Inc.
Zacks Rank #2 Jabil is gaining from sustained strength in AI infrastructure demand, which continues to support growth across its Intelligent Infrastructure business. This growth is being driven by strong customer demand, disciplined execution and capabilities spanning compute, storage, networking, optics, power, cooling and rack-level integration.
Future growth of JBL will come from growing AI infrastructure and will be backed by capacity additions, broader customer relationships and improving demand across several non-AI markets. AI-related demand continues to accelerate, supported by cloud infrastructure, networking, power, cooling and semiconductor equipment. JBL expects six Intelligent Infrastructure customers to each generate more than $1 billion in fiscal 2027.
Diversification Strategy
JBL’s focus on end-market and product diversification remains a key long-term catalyst. Management continues to target a balanced portfolio so that no individual product or product family becomes an outsized contributor to operating income or cash flow.
This strategy improves the stability of earnings through industry cycles while allowing the company to capture opportunities across AI infrastructure, healthcare, industrial and automation markets. Better-than-expected performance in automotive and connected living further demonstrates the benefits of this diversified operating model.
Strong Guidance
For the third quarter, management expects net revenue between $10.6 billion and $11.4 billion, operating income between $481 million and $541 million, earnings per share (EPS) between $2.78 to $3.18 and adjusted EPS between $3.80 to $4.20.
JBL expects fiscal 2027 revenues of about $44.5B, up 24% annually, with core EPS projected at $17.55. AI-related revenues are expected to reach about $22.1B in fiscal 2027, representing 54% annual growth.
Solid Estimate Revisions
Jabil has an expected revenue and earnings growth rate of 24.10% and 29.4%, respectively, for the current year (ending August 2027). The Zacks Consensus Estimate for the current year’s earnings has improved 1.6% over the last seven days.
JBL has an expected revenue and earnings growth rate of 14.2% and 28.2%, respectively, for the next year. The Zacks Consensus Estimate for next year’s earnings has improved 3.3% over the last seven days.
Image Source: Zacks Investment Research
Robust Price Upside Potential
The short-term average price target of brokerage firms represents an increase of 44.1% from the last closing price of $304.41. The brokerage target price is currently in the range of $378-$475. This indicates a maximum upside of 56% and no downside.