Sanmina Q3 Earnings Call Signals AI Infrastructure Growth Strategy

Sanmina Corporation SANM entered its third-quarter fiscal 2026 earnings call with a focus on expanding its role in artificial intelligence (AI) infrastructure manufacturing. Management highlighted stronger demand, new customer wins and progress in integrating ZT Systems.

The discussion centered on how Sanmina is positioning its combined capabilities for accelerated compute, data center infrastructure and broader AI-related opportunities.

SANM Expands AI Infrastructure Focus

Sanmina reported third-quarter fiscal 2026 non-GAAP earnings per share (EPS) of $3.31, beating the Zacks Consensus Estimate of $2.78. Revenues of $3.46 billion exceeded the Zacks Consensus Estimate of $3.43 billion .

Sanmina Corporation Price, Consensus and EPS Surprise

Sanmina Corporation price-consensus-eps-surprise-chart | Sanmina Corporation Quote

CEO Jure Sola said the company delivered strong execution across both core Sanmina operations and the ZT Systems business. He highlighted progress in customer orders, capacity expansion and vertical integration efforts.

CFO Jonathan Faust said revenue growth was supported by strength across end markets, including continued momentum in cloud and AI infrastructure. Core Sanmina revenues reached $2.4 billion, up 17% year over year, while ZT Systems revenues were $1.1 billion.

Sanmina Builds ZT Systems Integration

Sanmina’s management emphasized that the ZT Systems integration remains a key part of its growth strategy. Faust said the company is executing a three-phase integration plan focused on operational improvements, investments and long-term synergies.

The company continued investing in incremental power, liquid cooling, test cell capacity and automation capabilities to support next-generation accelerated compute production. Management said customer validation efforts are progressing with AMD and other partners.

Sola noted that combining ZT Systems’ large-scale systems integration capabilities with Sanmina’s manufacturing footprint is expanding the company’s addressable market. He added that new business wins are beginning to benefit core Sanmina facilities.

SANM Sees Broad-Based Demand Growth

Sanmina’s communication networks and cloud AI infrastructure market represented 62% of third-quarter revenues or $2.148 billion, surging 173.2% year over year. Management attributed growth to AI demand, new programs and customer additions.

Sola said demand remains strong across accelerated compute, general-purpose compute, storage, networking and optical systems. The company also highlighted investments in high-technology printed circuit boards and AI system rack capabilities.

During the call, management said core business bookings were strong, with a book-to-bill above 1.1. Executives also pointed to continued opportunities across the industrial, medical, defense and aerospace markets.

Sanmina Raises FY26 Outlook

Sanmina expects fiscal 2026 revenues of $14.0 billion to $14.3 billion compared with its prior outlook of $13.7 billion to $14.3 billion. The company also increased its non-GAAP EPS outlook to $11.90-$12.20 from $10.75-$11.35.

For the fourth quarter, management guided revenues to $3.3 billion to $3.6 billion and non-GAAP EPS to $3.05 to $3.35. The outlook includes expectations for continued contributions from engineering services and strategic investments.

Sola said Sanmina remains confident in achieving more than $16 billion in fiscal 2027 revenues. Management expects growth to accelerate through fiscal 2027 and continue into fiscal 2028, driven by AI infrastructure demand.

SANM Addresses Analyst Questions

A Bank of America analyst asked about margins as ZT Systems becomes a larger contributor. Faust explained that third-quarter margins benefited from business mix, core Sanmina strength and nonrecurring engineering services tied to preproduction activities.

Faust said engineering services are expected to continue contributing in the near term before declining as production ramps up. He maintained that longer-term operating margins are expected in the 6-7% range.

A JPMorgan analyst asked about additional AI-related customer wins. Management discussed broader cloud and AI infrastructure opportunities, including new platform programs and demand across rack systems, networking and high-technology components.

Sanmina Maintains Growth Investment Focus

Sanmina ended the third quarter with $1.84 billion in cash and cash equivalents and free cash flow of $23.7 million. Management said working capital investment will increase as AI-related programs expand.

Executives emphasized continued investment in manufacturing capacity, including metal fabrication, printed circuit boards, power systems and ZT Systems capabilities. These investments are intended to support future production growth.

Management’s overall message was centered on execution, capacity expansion and customer engagement as Sanmina builds its AI infrastructure presence.

Zacks Signals Point to Mixed Factors

SANM carries a Zacks Rank #3 (Hold). The Zacks Rank reflects earnings estimate revision trends and can change as analysts update their expectations following new company information. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The stock has a Value Score of B, Growth Score of A, Momentum Score of F and VGM Score of A. Zacks Style Scores evaluate value, growth, momentum and combined characteristics, with higher scores indicating stronger relative attributes within each style category.

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