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Buy 3 Top-Ranked Undervalued AI Infrastructure Giants to Boost Gains
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Key Takeaways
SMCI benefits from AI infrastructure demand, higher revenue guidance and expanding manufacturing capacity.
JBL targets 24% fiscal 2027 revenue growth, supported by AI demand and expanding hyperscale relationships.
FLEX raised FY 2027 revenue and earnings guidance, with its data center business driving growth prospects.
Wall Street has maintained its northbound journey in 2026 albeit at a slow pace after an astonishing rally in the last three years. Several stocks have jumped this year. Here, we have selected three artificial intelligence (AI) infrastructure giant stocks that are highly undervalued at present.
These stocks currently carry a top Zacks rank, indicating significant price upside in the near term. The combination of a top Zacks rank and undervaluation should ensure a solid rally for these stocks in the rest of 2026. It is prudent to invest in these stocks now as they are unlikely to stay undervalued for a long time.
The chart below shows the price performance of our three picks year to date.
Image Source: Zacks Investment Research
Super Micro Computer Inc.
Super Micro Computer stands to benefit from sustained AI infrastructure investment and demand for integrated, energy-efficient data centers. SMCI’s rapid adoption of new accelerator platforms and expanding liquid-cooling capacity support faster deployments.
DCBBS software, services and enterprise partnerships broaden SMCI’s offering and offer scope for higher-value sales. Record revenues, an increased sales outlook and growing manufacturing capacity reinforce its growth potential. Modular engineering helps SMCI respond quickly to evolving customer needs. Moreover, expanding solutions capabilities and better operating efficiency support its long-term growth.
Strong Outlook
For the second quarter of fiscal 2027, SMCI expects sales of $19.5 billion to $21.5 billion and non-GAAP earnings of $1.66 to $1.90 per share. Gross margin is projected in the range of 12% to 12.5%, reflecting continued shifts in customer and product mix.
For fiscal 2027, the company raised its revenue outlook to $72 billion to $82 billion from $65 billion to $72 billion. It anticipates a full-year gross margin of 11.8% to 12.2%. Management cited stronger visibility into customer deployment schedules but flagged component shortages, power availability and data center readiness as constraints on delivery timing.
Solid Estimate Revisions
Super Micro Computer has an expected revenue and earnings growth rate of 98.8% and 74.7%, respectively, for the current year (ending June 2027). The Zacks Consensus Estimate for the current year’s earnings has improved 31.5% over the last seven days.
Attractive Valuation
The stock has a forward price/earnings (P/E) of 4.38X, compared with the industry’s P/E of 11.73X and the S&P 500’s P/E of 18.97X. It has a price/sale (P/S) of 0.34X compared with the industry’s P/S of 4.45X and the S&P 500’s P/S of 3.12X. SMCI has a price/earnings-to-growth (PEG) of 0.12X, significantly lower than the industry’s PEG of 0.99X and the S&P 500’s PEG of 1.88X.
Robust Price Upside Potential
The short-term average price target of brokerage firms represents an increase of 42.6% from the last closing price of $30.43. The brokerage target price is currently in the range of $15-$65. This indicates a maximum upside of 113.6% and a downside of 50.7%.
Jabil Inc.
Jabil is expanding its role in AI infrastructure as customers rely on its engineering, networking, power and cooling capabilities. New capacity backed by customer programs and broader hyperscale relationships supports JBL’s long-term growth. Diversification into healthcare, energy infrastructure, automotive and robotics adds resilience.
JBL’s global expansion strengthens supply chain flexibility and supports rising demand for advanced manufacturing solutions. An asset-light model, rising core margins and healthy free cash flow provide room for investment and shareholder returns.
Strong Outlook
For the first quarter of fiscal 2027, JBL expects revenues between $10.6 billion and $11.4 billion. Core earnings are projected to be $3.80-$4.20 per share, with core operating income between $592 million and $652 million.
The segmental revenue guidance calls for $6.3 billion from Intelligent Infrastructure, $3.5 billion from Regulated Industries and $1.2 billion from Intelligent Devices & Robotics. The outlook points to continued concentration of growth in infrastructure-related programs.
For fiscal 2027, Jabil projects net revenues of $44.5 billion, indicating 24% year-over-year growth. The core operating margin is expected to expand to 6.1%, while core earnings are forecast at $17.55 per share. Adjusted free cash flow is expected to be $1.6 billion.
Management expects accelerating AI demand to be complemented by growth in automotive, healthcare, energy infrastructure, defense and aerospace, and warehouse and retail automation.
Solid Estimate Revisions
Jabil has an expected revenue and earnings growth rate of 24.1% and 34.5%, respectively, for the current year (ending August 2027). The Zacks Consensus Estimate for the current year’s earnings has improved 6.2% over the last 30 days.
Attractive Valuation
The stock has a forward P/E of 14.18X, compared with the industry’s P/E of 19.35X and the S&P 500’s P/E of 18.97X. It has a P/S of 0.72X compared with the industry’s P/S of 0.77X and the S&P 500’s P/S of 3.12X. JBL has a PEG of 0.48X, significantly lower than the industry’s PEG of 0.83X and the S&P 500’s PEG of 1.88X.
Robust Price Upside Potential
The short-term average price target of brokerage firms represents an increase of 67.5% from the last closing price of $258.89. The brokerage target price is currently in the range of $378-$475. This indicates a maximum upside of 83.4% and no downside.
Flex Ltd.
Flex stands to benefit from sustained AI infrastructure spending as demand for integrated power, cooling and compute solutions expands. FLEX’s data center platform, supported by acquisitions, offers a path to higher-value programs and margin gains. Diversified industrial and communications operations add resilience, while automation and productivity support earnings growth.
The planned Axiom spin-off should sharpen FLEX’s strategic focus and capital allocation across both businesses. Recent margin expansion and raised fiscal 2027 guidance reinforce the favorable outlook. Improving business mix, broader infrastructure capabilities and attractive forward valuation pave the way for FLEX’s long-term growth.
Strong Outlook
For the third quarter of fiscal 2027, Flex expects revenues between $8.87 billion and $9.17 billion. Adjusted operating income is projected in the range of $685-$715 million, with adjusted earnings of $1.19-$1.25 per share.
Management expects CPI revenues to grow 105-115% year over year. RMS revenues are projected to increase in the low-single to mid-single digits, while ITS revenues are expected to grow in the mid-single to high-single digits.
Flex raised its fiscal 2027 revenue guidance to $34.9-$35.9 billion from $33.7-$35.2 billion. The adjusted operating margin outlook was increased to 7.6-7.8% from 7-7.2%. Adjusted earnings guidance was raised to $4.84-$5.16 per share from $4.42-$4.74.
Management expects CPI revenues to increase 75-85%, while RMS and ITS combined revenues are projected to grow 8-11%. The updated outlook incorporates recent acquisitions, including EPC Power, which was completed on Oct. 14, 2026. Management continues to target a tax-free spin-off of CPI, operating under the Axiom name, during the first quarter of calendar 2027.
Solid Estimate Revisions
Flex has an expected revenue and earnings growth rate of 26.9% and 49.4%, respectively, for the current year (ending March 2027). The Zacks Consensus Estimate for the current year’s earnings has improved 6% over the last 30 days.
Attractive Valuation
The stock has a forward P/E of 15.43X, compared with the industry’s P/E of 18.34X and the S&P 500’s P/E of 18.97X. It has a P/S of 0.91X compared with the industry’s P/S of 1.80X and the S&P 500’s P/S of 3.12X. FLEX has a PEG of 0.32X, significantly lower than the industry’s PEG of 1.23X and the S&P 500’s PEG of 1.88X.
Robust Price Upside Potential
The short-term average price target of brokerage firms represents an increase of 97.3% from the last closing price of $78.97. The brokerage target price is currently in the range of $128-$180. This indicates a maximum upside of 127.9% and no downside.
View the Zacks #1 Rank List
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Buy 3 Top-Ranked Undervalued AI Infrastructure Giants to Boost Gains
Key Takeaways
Wall Street has maintained its northbound journey in 2026 albeit at a slow pace after an astonishing rally in the last three years. Several stocks have jumped this year. Here, we have selected three artificial intelligence (AI) infrastructure giant stocks that are highly undervalued at present.
These stocks currently carry a top Zacks rank, indicating significant price upside in the near term. The combination of a top Zacks rank and undervaluation should ensure a solid rally for these stocks in the rest of 2026. It is prudent to invest in these stocks now as they are unlikely to stay undervalued for a long time.
These stocks are: Super Micro Computer Inc. (SMCI - Free Report) , Jabil Inc. (JBL - Free Report) and Flex Ltd. (FLEX - Free Report) . Each of our picks currently sports a Zacks Rank #1 (Strong 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 year to date.
Image Source: Zacks Investment Research
Super Micro Computer Inc.
Super Micro Computer stands to benefit from sustained AI infrastructure investment and demand for integrated, energy-efficient data centers. SMCI’s rapid adoption of new accelerator platforms and expanding liquid-cooling capacity support faster deployments.
DCBBS software, services and enterprise partnerships broaden SMCI’s offering and offer scope for higher-value sales. Record revenues, an increased sales outlook and growing manufacturing capacity reinforce its growth potential. Modular engineering helps SMCI respond quickly to evolving customer needs. Moreover, expanding solutions capabilities and better operating efficiency support its long-term growth.
Strong Outlook
For the second quarter of fiscal 2027, SMCI expects sales of $19.5 billion to $21.5 billion and non-GAAP earnings of $1.66 to $1.90 per share. Gross margin is projected in the range of 12% to 12.5%, reflecting continued shifts in customer and product mix.
For fiscal 2027, the company raised its revenue outlook to $72 billion to $82 billion from $65 billion to $72 billion. It anticipates a full-year gross margin of 11.8% to 12.2%. Management cited stronger visibility into customer deployment schedules but flagged component shortages, power availability and data center readiness as constraints on delivery timing.
Solid Estimate Revisions
Super Micro Computer has an expected revenue and earnings growth rate of 98.8% and 74.7%, respectively, for the current year (ending June 2027). The Zacks Consensus Estimate for the current year’s earnings has improved 31.5% over the last seven days.
Attractive Valuation
The stock has a forward price/earnings (P/E) of 4.38X, compared with the industry’s P/E of 11.73X and the S&P 500’s P/E of 18.97X. It has a price/sale (P/S) of 0.34X compared with the industry’s P/S of 4.45X and the S&P 500’s P/S of 3.12X. SMCI has a price/earnings-to-growth (PEG) of 0.12X, significantly lower than the industry’s PEG of 0.99X and the S&P 500’s PEG of 1.88X.
Robust Price Upside Potential
The short-term average price target of brokerage firms represents an increase of 42.6% from the last closing price of $30.43. The brokerage target price is currently in the range of $15-$65. This indicates a maximum upside of 113.6% and a downside of 50.7%.
Jabil Inc.
Jabil is expanding its role in AI infrastructure as customers rely on its engineering, networking, power and cooling capabilities. New capacity backed by customer programs and broader hyperscale relationships supports JBL’s long-term growth. Diversification into healthcare, energy infrastructure, automotive and robotics adds resilience.
JBL’s global expansion strengthens supply chain flexibility and supports rising demand for advanced manufacturing solutions. An asset-light model, rising core margins and healthy free cash flow provide room for investment and shareholder returns.
Strong Outlook
For the first quarter of fiscal 2027, JBL expects revenues between $10.6 billion and $11.4 billion. Core earnings are projected to be $3.80-$4.20 per share, with core operating income between $592 million and $652 million.
The segmental revenue guidance calls for $6.3 billion from Intelligent Infrastructure, $3.5 billion from Regulated Industries and $1.2 billion from Intelligent Devices & Robotics. The outlook points to continued concentration of growth in infrastructure-related programs.
For fiscal 2027, Jabil projects net revenues of $44.5 billion, indicating 24% year-over-year growth. The core operating margin is expected to expand to 6.1%, while core earnings are forecast at $17.55 per share. Adjusted free cash flow is expected to be $1.6 billion.
Management expects accelerating AI demand to be complemented by growth in automotive, healthcare, energy infrastructure, defense and aerospace, and warehouse and retail automation.
Solid Estimate Revisions
Jabil has an expected revenue and earnings growth rate of 24.1% and 34.5%, respectively, for the current year (ending August 2027). The Zacks Consensus Estimate for the current year’s earnings has improved 6.2% over the last 30 days.
Attractive Valuation
The stock has a forward P/E of 14.18X, compared with the industry’s P/E of 19.35X and the S&P 500’s P/E of 18.97X. It has a P/S of 0.72X compared with the industry’s P/S of 0.77X and the S&P 500’s P/S of 3.12X. JBL has a PEG of 0.48X, significantly lower than the industry’s PEG of 0.83X and the S&P 500’s PEG of 1.88X.
Robust Price Upside Potential
The short-term average price target of brokerage firms represents an increase of 67.5% from the last closing price of $258.89. The brokerage target price is currently in the range of $378-$475. This indicates a maximum upside of 83.4% and no downside.
Flex Ltd.
Flex stands to benefit from sustained AI infrastructure spending as demand for integrated power, cooling and compute solutions expands. FLEX’s data center platform, supported by acquisitions, offers a path to higher-value programs and margin gains. Diversified industrial and communications operations add resilience, while automation and productivity support earnings growth.
The planned Axiom spin-off should sharpen FLEX’s strategic focus and capital allocation across both businesses. Recent margin expansion and raised fiscal 2027 guidance reinforce the favorable outlook. Improving business mix, broader infrastructure capabilities and attractive forward valuation pave the way for FLEX’s long-term growth.
Strong Outlook
For the third quarter of fiscal 2027, Flex expects revenues between $8.87 billion and $9.17 billion. Adjusted operating income is projected in the range of $685-$715 million, with adjusted earnings of $1.19-$1.25 per share.
Management expects CPI revenues to grow 105-115% year over year. RMS revenues are projected to increase in the low-single to mid-single digits, while ITS revenues are expected to grow in the mid-single to high-single digits.
Flex raised its fiscal 2027 revenue guidance to $34.9-$35.9 billion from $33.7-$35.2 billion. The adjusted operating margin outlook was increased to 7.6-7.8% from 7-7.2%. Adjusted earnings guidance was raised to $4.84-$5.16 per share from $4.42-$4.74.
Management expects CPI revenues to increase 75-85%, while RMS and ITS combined revenues are projected to grow 8-11%. The updated outlook incorporates recent acquisitions, including EPC Power, which was completed on Oct. 14, 2026. Management continues to target a tax-free spin-off of CPI, operating under the Axiom name, during the first quarter of calendar 2027.
Solid Estimate Revisions
Flex has an expected revenue and earnings growth rate of 26.9% and 49.4%, respectively, for the current year (ending March 2027). The Zacks Consensus Estimate for the current year’s earnings has improved 6% over the last 30 days.
Attractive Valuation
The stock has a forward P/E of 15.43X, compared with the industry’s P/E of 18.34X and the S&P 500’s P/E of 18.97X. It has a P/S of 0.91X compared with the industry’s P/S of 1.80X and the S&P 500’s P/S of 3.12X. FLEX has a PEG of 0.32X, significantly lower than the industry’s PEG of 1.23X and the S&P 500’s PEG of 1.88X.
Robust Price Upside Potential
The short-term average price target of brokerage firms represents an increase of 97.3% from the last closing price of $78.97. The brokerage target price is currently in the range of $128-$180. This indicates a maximum upside of 127.9% and no downside.