Jabil Skyrockets 119.6% in a Year: Should You Buy the Stock?

Jabil, Inc. JBL has gained 119.6% in the past year compared with the Electronic Manufacturing Services industry’s growth of 136.7%. It has underperformed the Zacks Computer & Technology sector but outperformed S&P 500’s growth during this period.

Among its competitors, the company has outperformed Sanmina Corporation SANM but underperformed Celestica, Inc. CLS. Celestica has surged 311.4%, while Sanmina has gained 80.1%.

JBL Rides on Product Innovation, Strategic Buyout

AI is no longer just an enabler of some isolated tasks for businesses; it has become a critical component in the enterprise operations, supporting a wide range of applications from code generation, document processing, customer support, product designing, simulation, supply chain optimization and more. These growing AI workloads require cutting-edge infrastructure that can support high-density compute, low-latency networking and an advanced cooling system. Legacy data center infrastructure is struggling to keep pace with such demanding AI applications.

Per Grandview Research AI data center market is expected to reach $60.49 billion in 2030 from $13.62 billion in 2025, with a compound annual growth rate of 28.3%. Jabil has been taking several strategic initiatives to capitalize on this emerging market trend. The company has formed a collaboration with Endeavour Energy LLC. Endeavour specializes in providing sustainable data center infrastructure. Leveraging Endeavour’s data center platform, Jabil is aiming to deliver on-demand data center capacity, which can be deployed quickly. The solution effectively addresses some of the critical pain points of modern data centers, which are overprovisioning and underutilization of resources.

The precise, demand-driven approach eliminates the need for high capital investment upfront. Endeavour’s efficient Edge Data center platforms, combined with Jabil’s manufacturing and global supply chain orchestration solutions, will ensure rapid scalability and better cooling efficiency in data center infrastructure. Such developments augur well for Jabil’s long-term growth.

The acquisition of Mikros Technologies has significantly expanded Jabil’s prospects in the AI data center market. Mikros specializes in advanced cooling solutions. Growing usage of AI workloads in data centers requires significantly high computing power. The substantial heat generated through this process needs a best-in-class cooling system to ensure consistent performance and reliability of data centers. This is an area that presents a significant growth opportunity for Jabil following this buyout. 

Jabil is set to invest $500 million over the next several years in the Southeast U.S. region. The expansion of manufacturing capabilities and development of a skilled workforce for the cloud and AI data center infrastructure solutions are the primary objectives for the investment. The initiative will strengthen Jabil’s position in the AI hardware supply chain. Celestica and Sanmina are also ramping up investment in the AI infrastructure space. However, with a strong portfolio, Jabil has a competitive edge in the market.

Focus on Product Diversification, AI Integration are Positives

Jabil’s focus on end-market and product diversification is a key catalyst. The company boasts a strong position in multiple verticals, including capital equipment, warehouse automation, 5G wireless, cloud computing, renewable energy and automotive. A large-scale portfolio of business sectors offers Jabil a high degree of resiliency during times of macroeconomic and geopolitical disruption. The company’s focus on improving working capital management is a positive factor. Jabil is steadily integrating leading-edge AI and ML capabilities to enhance the efficiency of its internal processes. These factors are driving operational efficiency and boosting margin.

Estimate Revision Trend

Earnings estimates for Jabil for 2025 have moved up 4.45% to $9.39 over the past 60 days, while the same for 2026 has increased 7.39% to $11.05. The upward estimate revision depicts bullish sentiments for the stock.

Key Valuation Metric of JBL

From a valuation standpoint, JBL appears to be relatively cheaper than the industry but above its mean. Going by the price/earnings ratio, the company shares currently trade at 21.00 forward earnings, lower than 23.59 for the industry but above its mean of 16.73.

End Note

The company is expected to benefit from solid momentum in the AI data center infrastructure market. In addition, its strong focus on innovation and portfolio expansion is also boosting prospects in the multiple end markets, including semiconductors, battery systems, electric vehicles, 5G and more. Northward estimate revision portrays growing investors’ confidence. With an attractive valuation and a robust portfolio, Jabil is well-positioned to gain from emerging market dynamics. The company currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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