UBS Upgrades Jabil to Buy as AI Investments from Amazon, Meta, Google Drive Multiyear Growth Cycle

AI will drive even more gains for this circuit board builder as hyperscaler demand grows, says UBS

Jabil has positioned itself to become a beneficiary of hyperscalers' massive spending on artificial intelligence, making it a good addition to investor portfolios, according to UBS. The investment bank upgraded the circuit board maker to buy from neutral. It has a $430 price target on shares, implying 28% upside from Monday's close. "We upgrade Jabil to Buy on a multiyear growth cycle fueled by AI investment from Amazon, Meta, and Google, rising healthcare demand as capacity comes online, and scaling automation and robotics markets," analyst David Vogt said Monday in a note to clients. "These drivers should lift revenue and [fiscal year 2027] operating margin above 6%." JBL YTD mountain JBL year to date As artificial intelligence adoption accelerates, big companies are pouring more capital into the technology. Four major hyperscalers - Amazon, Alphabet , Microsoft , Meta and Amazon - are projected to spend a combined nearly $700 billion on their AI initiatives in 2026, according to a spate of filings from the firms. U.S. hyperscaler capital expenditures for AI-related projects could also top $1 trillion by the end of this year, according to a report from Goldman Sachs Research. UBS' Vogt noted that Jabil has prepared itself to seize opportunities related to those AI buildouts by reorienting its business toward high-growth areas. "Jabil has pruned businesses that did not meet growth, margin, and [return-on-investment] thresholds while investing in faster growth markets like robotics/automation," he wrote. UBS' call falls in line with consensus on Wall Street. Of the 13 analysts covering Jabil, 10 have a buy or strong buy on the stock, LSEG data shows. Shares have jumped 48% year to date and gained 2% in the premarket.

Jabil stock upgraded to buy by UBS on AI growth outlook By Investing.com

Investing.com - UBS upgraded Jabil (NYSE:JBL) to Buy from Neutral with a price target of $430.00. The stock currently trades at $336.63, suggesting roughly 28% upside to the analyst's target and sitting about 22% below its 52-week high of $428.93. Analyst David Vogt cited a multiyear growth cycle driven by AI investment from Amazon, Meta, and Google as the primary reason for the upgrade. The firm also pointed to rising healthcare demand as capacity comes online and scaling automation and robotics markets. UBS expects these drivers to lift Jabil's revenue and fiscal 2027 operating margin above 6%. The firm's earnings per share estimates are modestly above consensus. UBS anticipates a beat-and-raise cadence next year to support a roughly 22 times price-to-earnings ratio. This compares to a high-teens multiple on out-year earnings. The company currently trades at a P/E of 42.87, though its PEG ratio of 0.72 suggests attractive value relative to growth expectations. According to an InvestingPro tip, 8 analysts have revised their earnings upwards for the upcoming period, reinforcing the bullish sentiment. However, InvestingPro analysis indicates the stock is slightly overvalued based on its Fair Value assessment. For deeper insights, investors can access Jabil's comprehensive Pro Research Report, one of 1,400+ available on the platform. The firm's EPS growth forecast exceeds market expectations by approximately 150 basis points. In other recent news, Jabil Inc. announced a quarterly dividend of $0.08 per share, with payment scheduled for September 2, 2026. Additionally, the company authorized a significant share repurchase program, allowing for the buyback of up to $1.5 billion in common stock. This move provides flexibility for Jabil to repurchase shares at its discretion, depending on market conditions. Meanwhile, Jabil filed a mixed shelf registration statement with the SEC, enabling the company to offer various securities, though the size of the offering was not disclosed. In personnel changes, Badger Technologies, a division of Jabil, appointed John Gehre as its new CEO. Gehre brings extensive leadership experience from notable retailers such as Bass Pro Shops and The Container Store. On the analyst front, Stifel noted that AI infrastructure companies, which include Jabil, remain supply-constrained but are expected to continue beating estimates and raising guidance. These developments reflect Jabil's strategic financial maneuvers and leadership shifts amidst a dynamic market environment. This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.