Jabil Is Flying Under the Radar-But a 50% Surge May Be Coming

Jabil (NYSE: JBL) stock is on track to move higher in 2026, set a new all-time high, and continue trending higher through the year’s end. The reasons this move will reach the 25% to 50% upside target are its fundamental quality, growth outlook, technical setup, and analysts' sentiment. Starting with its fundamental quality, this tech-manufacturing play is supported by the rise of AI, the upgrade cycle it spawned, and the increasing penetration of digitization throughout society globally. 

The outlook for digitization in 2026 remains strong, with technology expected to represent over 20% of the global GDP, primarily due to widespread AI adoption. What this means for Jabil is the benefits to its core operations, including efficiency and development, and end-market demand across all vectors. 

Jabil Sentiment Trends Strengthen After Beat-and-Raise Quarter

Jabil had a strong Q1 fiscal year 2026 (FY2026) with revenue and profitability exceeding company guidance. The $8.31 billion in revenue is up nearly 19% year-over-year (YOY), outperforming MarketBeat’s reported consensus by 250 basis points, with strength in all end-markets. Within that, demand for cloud, datacenter, networking, and capital equipment was strongest, underpinning the robust outlook for the year. 

The impact of AI on the bottom line is impressive. The company logged 170 basis points of gross margin expansion and approximately 600 bps worth of operating margin improvement, driving accelerated bottom-line growth and outperformance. The adjusted operating income grew by 30%, despite a smaller top-line advance, resulting in $2.85 in adjusted EPS, up 42% YOY, including the impact of share buybacks. Free cash flow, the metric that matters most to investors, was also strong, up 20% to $272 million, sufficient to sustain the buyback program while maintaining balance-sheet health. 

Guidance was also strong, with management raising its revenue and earnings targets. The new $32.4 billion revenue target is more than 250 basis points above consensus, likely reflecting caution given the trends in place, with earnings expected to grow at a slightly faster pace. Trends in place include robust results and guidance from its largest clients, including AI leaders Amazon (NASDAQ: AMZN), Cisco Systems (NASDAQ: CSCO), and Broadcom (NASDAQ: AVGO), as well as signs of consumer resilience from key consumer tech companies like Apple (NASDAQ: AAPL). 

Analysts Are Leading Jabil to New Highs in 2026

MarketBeat logged no analyst revisions within the first six hours of the earnings release, but the initial response is bullish. Positive commentary from several analysts focused on the Q1 strength, end-market demand, and outlook for AI-focused spending in the upcoming year, extending the trends in place ahead of the release. They include increased coverage, firming sentiment, and an uptrend in the price targets. The consensus forecast assumes a 15% upside as of mid-December 2025, but the trends point to the high end of $267, which is sufficient for a 25% upside from the long-term moving average. 

Institutional activity also points to higher share prices. While the balance shifted incrementally toward selling in early Q4, the move is driven by profit-taking following the 95% rally from April to December. It is likely to revert to accumulation in early 2026, if not before, because of the value proposition and share buybacks.

Trading at only 15x its 2028 earnings outlook, this stock could rise by 25% within the next few quarters and then continue higher into the subsequent decade. Share buybacks are aggressive, decreasing the share count by an average of 5% YOY in Q1 FY2026. Until then, the balance for 2025 is nearly $2 bought for each sold, with institutions owning almost 95% of the stock, a solid support base for this market. 

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The article "Jabil Is Flying Under the Radar—But a 50% Surge May Be Coming" first appeared on MarketBeat.