Shares of Jabil jumped 8.7% to $408.15 after the contract electronics manufacturer posted fiscal Q3 results that cleared Wall Street expectations on every major metric, then raised its full-year outlook for the third consecutive quarter. The question investors now face: how much of the AI infrastructure boom is already baked into a stock that has gained 134% over the past year?
The Numbers Came in Well Above What Analysts Expected
Jabil reported Q3 net revenue of $8.8 billion and core (adjusted) earnings per share of $3.16 — handily topping analyst expectations of $3.08 EPS and $8.53 billion in revenue . Management raised its fiscal 2026 outlook for revenue, core operating margins, core EPS, and free cash flow . The Q4 guide alone tells the story: Jabil expects $9.2–$10.0 billion in Q4 revenue and GAAP EPS of $3.24–$3.64 , implying an acceleration that could push the full year well past the prior $34 billion revenue target set just last quarter.
AI Data Center Spending Is Doing the Heavy Lifting
CEO Mike Dastoor said "AI infrastructure demand remains extremely strong" and the full-year AI-related revenue outlook is "now meaningfully higher." As of Q1, AI-related revenue was projected to reach $12.1 billion in FY2026, representing 35% year-over-year growth . That figure has likely been revised upward again. In Q2, the Intelligent Infrastructure segment — which houses cloud, data center, and networking work — saw revenue jump 52% year-over-year . The macro backdrop supports this: the top five U.S. hyperscalers are projected to spend $660–$690 billion on AI infrastructure in 2026, up from $380 billion last year .
Weaker Corners of the Business Are Stabilizing, Not Surging
Dastoor noted "better-than-expected performance" in automotive and Connected Living — areas previously under pressure . But the automotive market, particularly in China, remains slow , and Connected Living & Digital Commerce revenue had declined 8% year-over-year last quarter . Recovery here is a nice hedge, not a growth engine.
The Valuation Debate Gets Louder
Jabil has surged roughly 134% over the past 52 weeks, far outpacing the S&P 500 . At $408, the stock trades at roughly 32× the prior full-year core EPS guide of $12.25 — a steep premium for a company that mainly sells manufacturing services, not finished products under its own brand . Supply chain constraints, particularly in memory and printed circuit boards , could cap how quickly Jabil converts booked demand into revenue. Investors betting on continued upside need AI spending to keep accelerating — and need Jabil to prove it can widen margins, not just grow the top line.