Jabil, a contract electronics manufacturer specializing in AI infrastructure, is poised for significant stock growth in June. Despite Micron Technology's prominence, Jabil is highlighted as an underrated alternative. The company's upcoming fiscal 2026 Q3 earnings report is expected to show robust performance driven by escalating demand for AI servers and related solutions. With a 60% stock increase already in 2026, continued upside is anticipated, making Jabil an attractive investment in the burgeoning AI market.
AI is accelerating Jabil's growth
Jabil, a key player in the AI infrastructure space, demonstrated accelerated growth in its fiscal Q2, with revenue climbing 23% year-over-year to $8.3 billion, a significant improvement from flat revenue in the prior year. Earnings per share also surged by 38% to $2.69. The company's fiscal Q3 revenue guidance projects $8.5 billion in revenue and $3.03 in EPS, indicating continued year-over-year increases of 9% and 19% respectively. This positive outlook is underpinned by soaring demand for its specialized AI server racks, liquid-cooling systems, and power management solutions essential for AI data centers. Jabil is proactively anticipating a 46% increase in its AI revenue this year, reaching $13.1 billion. This forecast was notably raised by $1 billion during their March earnings report, and analysts predict a similar upward revision in the upcoming Q3 report. This optimism is further fueled by Jabil's progress in securing a third hyperscaler customer for its data center offerings, a development expected to significantly bolster future earnings.
The stock's attractive valuation makes it a no-brainer buy
Despite an impressive 60% surge in its stock price during 2026, Jabil's valuation remains attractive, particularly when considering its future growth prospects. The stock currently trades at 52 times its trailing earnings, but its forward earnings multiple of 28 suggests that analysts anticipate a strong increase in Jabil's future earnings. This optimistic projection is well-supported by the broader trends in the AI server market, which is forecast to achieve a substantial annual growth rate of 34% through 2030. Such a sustained growth trajectory for the market in which Jabil operates provides a solid foundation for the company's long-term revenue and earnings expansion. The article draws a parallel with Dell Technologies, which recently reported exceptional results due to robust AI server demand, suggesting Jabil is similarly positioned to capitalize on this burgeoning market. Investors are encouraged to consider buying this AI infrastructure play before its anticipated growth fully materializes in its stock price.
Should you buy stock in Jabil right now?
For investors contemplating a purchase of Jabil stock, it's essential to consider a broader perspective on investment opportunities. The Motley Fool Stock Advisor analyst team, despite acknowledging Jabil's promising outlook, did not include it in their current list of the '10 best stocks' to buy. This highlights that while Jabil is a strong contender, other investment opportunities might offer even greater potential for returns. The article cites historical examples of Motley Fool Stock Advisor recommendations, such as Netflix (which yielded a 43,268% return from a $1,000 investment made in December 2004) and Nvidia (which generated a staggering 1,259,391% return from a $1,000 investment made in April 2005). These examples underscore the significant wealth-building potential identified by their expert analysis. The Stock Advisor's impressive average total return of 935%, significantly outperforming the S&P 500's 207% over the same period, emphasizes the value of their top stock selections. Therefore, prospective investors are advised to explore the latest 'top 10 list' from Stock Advisor to discover potentially more lucrative investment options, benefiting from a community-driven investment strategy.
