JBL Rides on Strength in Intelligent Infrastructure: Will it Persist?

Jabil, Inc. JBL is benefiting from solid momentum in the Intelligent Infrastructure segment. During the third quarter, the company generated $3.4 billion in revenues from this segment, beating the Zacks Consensus Estimate of $2.88 billion. The 51% uptick was driven by the strength of multiple end markets.

Strong demand for AI-related cloud and data center infrastructure business, including power, cooling and server rack solutions, drove revenues. Growing demand for testing gear drove net sales in the Capital Equipment vertical. The company has presented a bullish outlook for fiscal 2025 as it expects the healthy demand to continue for the remainder of the year. 

For fiscal 2025, the company is expected to generate $11.9 billion in revenues from the Intelligent Infrastructure segment. The growth is expected to be driven by year-over-year projected growth 54% from cloud & data center infrastructure and 56% from capital equipment. However, net sales from Networks & communications are expected to decline in fiscal 2025.

The company is steadily expanding its portfolio and manufacturing capacity to cater to high-growth markets. In the Southeast United States, the company is set to invest $500 million to expand its manufacturing to capitalize on the AI data center market expansion. Strong presence in the country will protect JBL from trade wars, geopolitical risks and boost its reliability among leading hyperscalers such as Amazon and Microsoft.

How Are Competitors Faring?

Jabil faces stiff competition from other industry leaders like Flex Ltd. FLEX and Celestica Inc. CLS. Flex is aggressively moving into the high-growth data center market. For the fiscal first quarter of 2026, Flex delivered strong results across its cloud and power portfolios. The company is set to gain from the booming AI infrastructure market backed by its robust portfolio.

The growing proliferation of AI-based applications and generative AI tools across industries presents a solid growth opportunity for Celestica. AI investments are driving demand for Celestica’s enterprise-level data communications and information processing infrastructure products, such as routers, switches, data center interconnects, edge solutions, and servers and storage-related products.

JBL’s Price Performance, Valuation and Estimates

Jabil has gained 97.8% in the past year compared with the Electronic-Manufacturing Services industry’s growth of 146.3%.

Going by the price/earnings ratio, the company’s shares currently trade at 19.14 forward earnings, lower than 24.83 for the industry but above its mean of 17.66.

The company’s earnings estimates have remained unchanged over the past 60 days.

Jabil carries a Zacks Rank 3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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

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