Embedded Files
Published Date : 26/06/2025
Jabil, a contract electronics manufacturer, is witnessing significant growth thanks to the rapid adoption of artificial intelligence (AI) in data centers. The company has raised its full-year guidance, making it an attractive investment.
Jabil, a contract electronics manufacturer, is witnessing significant growth thanks to the rapid adoption of artificial intelligence (AI) in data centers. The company has raised its full-year guidance, making it an attractive investment.
Jabil (NYSE: JBL) may not be a household name for investors looking to capitalize on the rapid adoption of artificial intelligence (AI), but a closer look at the company's recent results will make it clear that it is benefiting big-time from this technology.
Jabil is a contract electronics manufacturer that serves multiple industries, ranging from automotive to semiconductor equipment to networking to data centers. The company is now witnessing a nice acceleration in growth thanks to the fast-growing deployment of AI data center hardware, which is leading to an increase in demand for the company's cloud data center-focused offerings such as rack integration services.
This explains why Jabil delivered solid quarterly results recently and also raised its full-year guidance. Let's take a closer look at the company's numbers and see why it would be a good idea to buy this stock right now.
Jabil released its fiscal 2025 third-quarter results (for the three months ended May 31) on June 17. The company's revenue increased by 16% from the year-ago period, while earnings shot up 35% year over year. Even better, Jabil has raised its full-year revenue forecast to $29 billion from the prior estimate of $27.9 billion. It now expects fiscal 2025 earnings to land at $9.33 per share from the earlier expectation of $8.95 per share.
Jabil management remarked on the latest earnings conference call that it is witnessing an increase in demand for 'complex server and rack integration, advanced networking, innovative power, and cooling solutions' on account of the growing deployment of AI data centers. CEO Mike Dastoor said AI infrastructure demand is accelerating. The company estimates its AI revenue is on track to jump by 50% this year to $8.5 billion. AI, therefore, is set to account for almost 30% of Jabil's top line in fiscal 2025. Not surprisingly, the company plans to invest $500 million in shoring up its cloud and AI data center infrastructure manufacturing services in the long run.
Jabil intends to spend this money on bolstering its ability to design and manufacture complex AI server racks that can meet the growing power requirements and liquid-cooling needs in data centers. Importantly, the AI server market is expected to grow at an annual pace of 34% through 2030, so it won't be surprising to see AI moving the needle in a bigger way for the company.
Frequently Asked Questions (FAQS):
Frequently Asked Questions (FAQS):
Q: What is Jabil's core business?
A: Jabil is a contract electronics manufacturer that serves multiple industries, including automotive, semiconductor equipment, networking, and data centers.
Q: How has Jabil's revenue and earnings performed in the fiscal 2025 third quarter?
A: Jabil's revenue increased by 16% and earnings shot up 35% year over year in the fiscal 2025 third quarter.
Q: What is Jabil's forecast for fiscal 2025?
A: Jabil has raised its full-year revenue forecast to $29 billion and expects earnings to land at $9.33 per share.
Q: How is Jabil benefiting from AI?
A: Jabil is benefiting from the fast-growing deployment of AI data center hardware, leading to an increase in demand for its cloud data center-focused offerings such as rack integration services.
Q: What is Jabil's investment plan for AI infrastructure?
A: Jabil plans to invest $500 million in shoring up its cloud and AI data center infrastructure manufacturing services to meet the growing power requirements and liquid-cooling needs in data centers.
More Related Topics :
More Related Topics :
Page updated
Report abuse