Jabil Rides on AI Data Center Boom: Is More Growth Ahead?

Jabil, Inc. JBL is benefiting from solid momentum in the AI infrastructure market. The company has developed a comprehensive portfolio spanning computing, storage, networking, optics, power and cooling. Such an end-to-end product offering allows it to compete across several layers of the AI data-center buildout. Such broad exposure is translating into significant revenue growth. Jabil is expecting AI-related revenues of approximately $13.6 billion in fiscal 2026, up from $9 billion a year earlier.

To support the extended demand, Jabil is expanding manufacturing capacity across the United States, Mexico and India. Simultaneously, it is strengthening relationships with hyperscalers. The company won its third hyperscale customer in the third quarter. The AI data-center buildout is also increasing demand for high-speed networking equipment. Growing demand for InfiniBand and Ethernet, along with switchgear and silicon photonics, is a growth driver for the company. 

Expansion in the emerging market of India could be a long-term driver for the company. Jabil and Adani Enterprise are exploring a strategic alliance focused on building a multi-gigawatt AI data-center infrastructure manufacturing platform. The collaboration, if realized, could manufacture AI racks, liquid-cooled racks, servers, storage systems and networking equipment. If materialized, they could become a major revenue earner for Jabil.

However, it is to be noted that supply chain and execution risks remain. The rapid expansion of AI infrastructure is putting pressure on the supply of certain components such as high-bandwidth memory and high-density interconnect PCBs. Lead time has increased for certain components.

How Are Competitors Faring?

Jabil faces competition from Flex LTD. FLEX and Celestica, Inc. CLS in this domain. Flex continues to deepen its exposure to AI infrastructure through CPI (Cloud and Power Infrastructure), combining compute integration, cooling and power capabilities. In first-quarter fiscal 2027, CPI revenues rose 35% to $2.2 billion, led by Power as Cloud & Cooling programs continued to ramp. Flex is developing high-density power solutions and cooling technologies for next-generation AI systems.

Celestica is also benefiting from strong AI infrastructure demand, particularly in hyperscale computing and high-speed networking. The company is ramping 800G networking programs and steadily preparing for broader 1.6T deployments. Celestica’s Connectivity & Cloud Solutions revenues increased 84% year over year to $3.81 billion. Segment margin improved to 8.7% from 8.3%, reflecting favorable operating leverage and stronger execution as demand from hyperscale data center customers remained robust.

JBL’s Price Performance, Valuation and Estimates

Jabil has gained 68.4% in the past year compared with the industry’s growth of 73.8%.

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Going by the price/earnings ratio, the company’s shares currently trade at 22.09 forward earnings, higher than 21.91 for the industry.

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Earnings estimates for Jabil's fiscal 2026 have increased 3.07% to $12.74 over the past 60 days, while those for 2027 have also increased 12.93% to $16.59.

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Jabil currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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