Jabil surges on strong Q2 results, raises FY26 outlook
AI data center demand and Intelligent Infrastructure momentum drive earnings beat and guidance increase
Jabil Inc. shares jumped in pre-market trading Wednesday after the electronics manufacturing services provider reported second-quarter results that exceeded analyst expectations and lifted its full-year fiscal 2026 outlook, fueled by robust demand for artificial intelligence infrastructure.
The St. Petersburg, Florida-based company reported core diluted earnings per share of $2.69, surpassing analyst estimates of approximately $2.49 to $2.56. Net revenue reached $8.3 billion, topping the consensus forecast of $7.75 billion, according to data from MarketBeat. On a U.S. GAAP basis, operating income totaled $374 million with diluted EPS of $2.08.
"Jabil delivered a very strong second quarter, with results ahead of our expectations across revenue, core operating margin, and core EPS," Chief Executive Officer Mike Dastoor said in a statement. He attributed the outperformance to "continued momentum in Intelligent Infrastructure, where demand remains robust across cloud and data center infrastructure, networking and communications, and capital equipment."
Building on the stronger-than-expected quarter, Jabil raised its fiscal year 2026 guidance, now projecting net revenue of $34 billion and core diluted earnings per share of $12.25. The outlook represents an upward revision from previous guidance of $32.4 billion in revenue and $11.55 in core EPS, according to StreetInsider.
The Intelligent Infrastructure segment, which encompasses AI infrastructure, cloud data center networking, and communications equipment, emerged as the primary growth driver. Jabil anticipates AI-related revenues will reach approximately $12.1 billion in fiscal 2026, representing roughly 35% year-over-year growth. The company has committed to investing about $500 million over the next several years to expand its footprint in the Southeast United States to support cloud and AI data center customers.
The momentum builds on Jabil's strategic positioning in the AI data center market. In January 2026, the company completed the acquisition of Hanley Energy Group, a provider of energy management and critical power solutions for data centers, expected to contribute approximately $200 million in revenue for fiscal 2026. The deal enhances Jabil's capabilities in data center power distribution, a critical component of AI infrastructure deployments.
"We are increasingly confident in our outlook for the second half of the year," Dastoor said, emphasizing the company's focus on "profitable growth, disciplined execution, margin expansion, strong cash generation, and delivering long-term value for our shareholders."
Analysts have taken notice of Jabil's strategic shift toward AI infrastructure. JPMorgan recently raised its price target to $300 from $270 with an Overweight rating, citing expected "improved contribution in the upsides" from cyclical end markets and tailwinds from stronger AI-related revenues. Baird initiated coverage with an Outperform rating and $275 price target in early March, identifying Jabil as a "key AI enabler with multiple paths to growth." UBS also increased its target to $254 from $244 while maintaining a Neutral rating.
The Regulated Industries segment, which includes automotive and renewables, showed improvement during the quarter, though significant automotive growth is not expected until fiscal years 2027-28. The diversified portfolio provides a buffer against end-market volatility, even as AI infrastructure emerges as the primary growth engine.
Jabil's stock closed Tuesday at $262.61 and was trading at $266.16 in extended hours, up 1.35%, following the earnings announcement. The shares have gained more than 140% over the past 12 months, reflecting investor enthusiasm for the company's AI infrastructure positioning and improving profitability metrics.
With a market capitalization of approximately $27.6 billion and strong institutional ownership at nearly 98%, Jabil faces high expectations as it executes on its AI strategy. The company's ability to maintain margin expansion while scaling its data center operations will be a key focus for investors when it reports third-quarter results later this year.