Jabil Inc: F3Q26 Review: Robust AI Guide Implies Acceleration in Revenue Growth into FY27; Reit OW
Report Coverage
- Broker
- JPMorgan
- Region
- North America
- Sector
- AI Infrastructure, Real Estate
- Report Type
- Company Report
- Primary Focus
- AI-driven revenue growth and hyperscaler expansion
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Report Summary
Jabil delivered a robust F3Q26 beat and raised its FY26 AI revenue guidance to $13.6bn, while surprising investors with early FY27 AI revenue guidance implying ~50% y/y growth to $20bn+. JPMorgan reiterates its Overweight rating and raises the price target to $450 from $395, driven by Jabil's expanding hyperscaler customer base (now serving 3 of the top 4 US hyperscalers) and accelerating revenue growth trajectory into FY27.
Key Takeaways
- F3Q26 revenue of $8.75bn beat consensus of $8.64bn, with EPS of $3.16 exceeding consensus of $3.10, driven by better-than-expected revenues across Connected Living & Digital Commerce.
- FY26 AI revenue guidance raised to $13.6bn from $13.1bn prior, with early FY27 AI revenue guidance of ~50% y/y growth implying $20bn+ in FY27 AI revenues.
- Jabil won its third hyperscaler customer during the quarter, now serving 3 of the top 4 US hyperscalers, with the new customer expected to contribute hundreds of millions in FY27 before scaling to $1bn+ in FY28.
- Management targets operating margin expansion to 6%+ in FY27, supported by improving mix, operating leverage, and accretion from the Hanley acquisition (double-digit margins).
- Price target raised to $450 (Dec-27) from $395 (Dec-26), based on ~20x P/E on CY28E EPS of $22.78, with FY27E adjusted EPS raised ~8% to $16.90.
- Capacity expansion includes North Carolina (ramping to $1-3bn over 1-3 years), Memphis, and India, while maintaining capex discipline at 1.5-2.0% of revenue.
Why This Report Matters
Jabil's accelerating AI revenue growth and expanding hyperscaler customer base position it as a key beneficiary of the data center capex supercycle, with management's early FY27 guidance signaling strong visibility into continued revenue acceleration.
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