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Sanmina Rides on Holistic Growth: Should You Bet on the Stock?
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Key Takeaways
SANM has gained 69.3% in a year, outpacing its industry as revenues and earnings estimates rise.
Its ZT Systems buyout expands AI and cloud manufacturing and strengthens access to hyperscale providers.
Supply-chain delays, stiff competition, tariffs and high R&D costs are pressuring Sanmina's margins.
Sanmina Corporation (SANM - Free Report) has surged 69.3% over the past year compared with the industry’s growth of 54.2%. It has outperformed peers like Jabil, Inc. (JBL - Free Report) and Celestica Inc. (CLS - Free Report) . While Jabil has gained 49.7%, Celestica has risen 52.3% over this period.
Sanmina follows a vertically integrated manufacturing process, offering end-to-end solutions that include product design, manufacture, assembly, testing and aftermarket support. Such an end-to-end approach allows clients to rely on a single partner throughout the product lifecycle management. Vertical integration allows the company to easily develop customized solutions that cater to varied customer specifications operating in multiple sectors. This, in turn, streamlines processes and lowers costs, enabling Sanmina to achieve greater economies of scale.
Sanmina is also focusing on 42Q connected manufacturing that effectively integrates data from customers’ global factories and suppliers’ fleets, and creates an updated information base. It offers a unified data ecosystem with real-time data analytics capabilities that significantly improve visibility across the enterprise’s distributed manufacturing and accelerate the decision-making process.
The unified data ecosystem consolidates product and operational supply data into a single manufacturing data lake, enabling faster planning and improved responsiveness to market and product changes. Real-time data analytics help optimize shop floor inventory, reduce downtime and improve order flow. The 42Q connected manufacturing also offers enhanced quality monitoring for faster response to quality deviations, leading to reduced waste and better product reliability.
Sanmina has deployed the 42Q connected manufacturing in more than 70 factories across 15 countries, connecting more than 35,000 pieces of manufacturing equipment in the cloud. Such a technology-driven, customer-focused approach enables Sanmina to work closely with its customers to anticipate manufacturing requirements and modify its R&D initiatives accordingly. Attracting and developing strong customer relationships by delivering high-level customer service are the key strategies to drive commercial expansion. Such focused initiatives have helped the company to record a sharp rise in revenues.
Image Source: Zacks Investment Research
Synergies From ZT Systems Buyout
The buyout of ZT Systems' data center infrastructure manufacturing business from Advanced Micro Devices, Inc. (AMD - Free Report) has added massive scale to Sanmina’s AI and cloud manufacturing capabilities, offering a more comprehensive and integrated solution for the fast-growing Cloud and AI end-market. ZT The transaction enabled SANM to gain stronger access to hyperscale cloud providers, who are investing billions in AI infrastructure.
Advanced Micro also selected Sanmina as a manufacturing partner for its AI rack-scale solutions, enabling faster deployment of cloud AI infrastructure. The collaboration combined AMD’s AI chip-design capabilities with Sanmina’s manufacturing and systems integration expertise to accelerate the deployment of AI systems infrastructure.
Estimate Revision Trend
Earnings estimates for Sanmina for fiscal 2026 and 2027 have moved up 74.5% each to $12.11 and $13.94, respectively, since October 2025. The positive estimate revision depicts bullish sentiment about the stock’s growth potential.
Image Source: Zacks Investment Research
Supply-Chain Woes Hurt SANM
Sanmina has been heavily affected by supply-chain disruptions over the past few years. The wars in Europe and the Middle East have affected its suppliers and port operations. Owing to current geopolitical events, the company is currently experiencing delays and shortages of critical components, including capacitors and resistors. The lack of availability of such components is piling up the inventory of other components, as the company cannot manufacture the finished good without all the components. This has led to a delay in customer delivery. Management expects supply-chain issues to persist in the short to medium term.
Stiff Competition, High R&D Costs Dent SANM’s Growth Prospects
Intensifying competition in the electronics manufacturing services has adversely impacted Sanmina’s net sales. The company faces stiff competition from larger players like Jabil and Celestica, affecting its bottom line.
Moreover, Sanmina has significant international exposure. It generates about 80% of its net sales from products manufactured outside the United States. This exposes it to political and economic disruptions in the operating countries. The company also has major production facilities in China. The imposition of tariffs on these countries by the U.S. government has increased the cost of sales and strained margins. In addition, high R&D costs have affected its margins.
End Note
With a strong presence across multiple end markets, Sanmina is poised for long-term growth. In addition, strengthening technology leadership, combined with a customer-focused approach, is a key growth driver. Sanmina prioritizes expanding into high-growth industries, backed by its strong global network, deep expertise and unique value proposition in advanced electronics manufacturing. With upward earnings estimate revisions, the stock is witnessing positive investor sentiment.
However, stiff competition and supply-chain issues are likely to put pressure on bottom-line growth. High R&D costs erode its profitability to a large extent. Sanmina is facing a tough operating environment in China amid escalating tariffs, raising questions about its long-term viability plans in the communist country.
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Sanmina Rides on Holistic Growth: Should You Bet on the Stock?
Key Takeaways
Sanmina Corporation (SANM - Free Report) has surged 69.3% over the past year compared with the industry’s growth of 54.2%. It has outperformed peers like Jabil, Inc. (JBL - Free Report) and Celestica Inc. (CLS - Free Report) . While Jabil has gained 49.7%, Celestica has risen 52.3% over this period.
One-Year SANM Stock Price Performance
Image Source: Zacks Investment Research
Vertically Integrated Manufacturing Process: SANM’s USP
Sanmina follows a vertically integrated manufacturing process, offering end-to-end solutions that include product design, manufacture, assembly, testing and aftermarket support. Such an end-to-end approach allows clients to rely on a single partner throughout the product lifecycle management. Vertical integration allows the company to easily develop customized solutions that cater to varied customer specifications operating in multiple sectors. This, in turn, streamlines processes and lowers costs, enabling Sanmina to achieve greater economies of scale.
Sanmina is also focusing on 42Q connected manufacturing that effectively integrates data from customers’ global factories and suppliers’ fleets, and creates an updated information base. It offers a unified data ecosystem with real-time data analytics capabilities that significantly improve visibility across the enterprise’s distributed manufacturing and accelerate the decision-making process.
The unified data ecosystem consolidates product and operational supply data into a single manufacturing data lake, enabling faster planning and improved responsiveness to market and product changes. Real-time data analytics help optimize shop floor inventory, reduce downtime and improve order flow. The 42Q connected manufacturing also offers enhanced quality monitoring for faster response to quality deviations, leading to reduced waste and better product reliability.
Sanmina has deployed the 42Q connected manufacturing in more than 70 factories across 15 countries, connecting more than 35,000 pieces of manufacturing equipment in the cloud. Such a technology-driven, customer-focused approach enables Sanmina to work closely with its customers to anticipate manufacturing requirements and modify its R&D initiatives accordingly. Attracting and developing strong customer relationships by delivering high-level customer service are the key strategies to drive commercial expansion. Such focused initiatives have helped the company to record a sharp rise in revenues.
Image Source: Zacks Investment Research
Synergies From ZT Systems Buyout
The buyout of ZT Systems' data center infrastructure manufacturing business from Advanced Micro Devices, Inc. (AMD - Free Report) has added massive scale to Sanmina’s AI and cloud manufacturing capabilities, offering a more comprehensive and integrated solution for the fast-growing Cloud and AI end-market. ZT The transaction enabled SANM to gain stronger access to hyperscale cloud providers, who are investing billions in AI infrastructure.
Advanced Micro also selected Sanmina as a manufacturing partner for its AI rack-scale solutions, enabling faster deployment of cloud AI infrastructure. The collaboration combined AMD’s AI chip-design capabilities with Sanmina’s manufacturing and systems integration expertise to accelerate the deployment of AI systems infrastructure.
Estimate Revision Trend
Earnings estimates for Sanmina for fiscal 2026 and 2027 have moved up 74.5% each to $12.11 and $13.94, respectively, since October 2025. The positive estimate revision depicts bullish sentiment about the stock’s growth potential.
Image Source: Zacks Investment Research
Supply-Chain Woes Hurt SANM
Sanmina has been heavily affected by supply-chain disruptions over the past few years. The wars in Europe and the Middle East have affected its suppliers and port operations. Owing to current geopolitical events, the company is currently experiencing delays and shortages of critical components, including capacitors and resistors. The lack of availability of such components is piling up the inventory of other components, as the company cannot manufacture the finished good without all the components. This has led to a delay in customer delivery. Management expects supply-chain issues to persist in the short to medium term.
Stiff Competition, High R&D Costs Dent SANM’s Growth Prospects
Intensifying competition in the electronics manufacturing services has adversely impacted Sanmina’s net sales. The company faces stiff competition from larger players like Jabil and Celestica, affecting its bottom line.
Moreover, Sanmina has significant international exposure. It generates about 80% of its net sales from products manufactured outside the United States. This exposes it to political and economic disruptions in the operating countries. The company also has major production facilities in China. The imposition of tariffs on these countries by the U.S. government has increased the cost of sales and strained margins. In addition, high R&D costs have affected its margins.
End Note
With a strong presence across multiple end markets, Sanmina is poised for long-term growth. In addition, strengthening technology leadership, combined with a customer-focused approach, is a key growth driver. Sanmina prioritizes expanding into high-growth industries, backed by its strong global network, deep expertise and unique value proposition in advanced electronics manufacturing. With upward earnings estimate revisions, the stock is witnessing positive investor sentiment.
However, stiff competition and supply-chain issues are likely to put pressure on bottom-line growth. High R&D costs erode its profitability to a large extent. Sanmina is facing a tough operating environment in China amid escalating tariffs, raising questions about its long-term viability plans in the communist country.
With a Zacks Rank #3 (Hold), Sanmina appears to be treading in the middle of the road, and investors could be better off if they trade with caution. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.