Market Overview - The U.S. stock market experienced a rally in 2023 and 2024, continuing into the first half of 2025, primarily driven by the technology sector and the adoption of generative AI technology [2][4] - The AI-driven rally faced setbacks in early 2025 due to the introduction of the low-cost Chinese DeepSeek AI platform, U.S. export restrictions on high-end AI processors to China, and geopolitical tensions [3][4] AI Infrastructure Investment - The AI infrastructure sector is gaining momentum, with fears related to DeepSeek being overblown [4] - Four major companies are projected to invest $325 billion in AI infrastructure in 2025, marking a 46% year-over-year increase in capital expenditure [7][9] - The total addressable global sovereign AI market is estimated to reach $1.5 trillion [8] Recommended AI Stocks - Five AI stocks are recommended for investment in the second half of the year, all showing strong performance and a Zacks Rank 1 (Strong Buy): Jabil Inc. (JBL), Twilio Inc. (TWLO), UiPath Inc. (PATH), Intuit Inc. (INTU), and Dell Technologies Inc. (DELL) [5][9] Company Insights Jabil Inc. (JBL) - Jabil is benefiting from growth in capital equipment and AI-powered data center infrastructure, with a focus on product diversification [10] - The company has an expected revenue growth rate of 5.9% and earnings growth rate of 18.5% for the next year [12] Twilio Inc. (TWLO) - Twilio is enhancing its cloud communications platform with generative AI, launching Customer AI technology to improve customer engagement [13][15] - The expected revenue growth rate for Twilio is 7.9% and earnings growth rate is 22.3% for the current year [18] UiPath Inc. (PATH) - UiPath offers a comprehensive automation platform with embedded AI capabilities, introducing new generative AI features to enhance automation [19][20] - The expected revenue growth rate for UiPath is 8.5% and earnings growth rate is 5.7% for the current year [21] Intuit Inc. (INTU) - Intuit is experiencing steady revenue growth from its Online Ecosystem and is integrating generative AI into its products to enhance customer insights [22][23] - The expected revenue growth rate for Intuit is 11.7% and earnings growth rate is 13.7% for the next year [25] Dell Technologies Inc. (DELL) - Dell is seeing strong demand for AI servers, securing $12.1 billion in AI server orders, and expanding its cloud services [26][28] - The expected revenue growth rate for Dell is 8.7% and earnings growth rate is 16% for the current year [29]

Financial Performance - Net revenue for the three months ended May 31, 2025, was $7,828 million, a 15.7% increase from $6,765 million for the same period in 2024[117] - Gross profit for the three months ended May 31, 2025, was $681 million, representing 8.7% of net revenue, down from 9.0% in the same period in 2024[128] - Net income attributable to Jabil Inc. for the three months ended May 31, 2025, was $222 million, compared to $129 million for the same period in 2024[117] - Operating income for the three months ended May 31, 2025, was $403 million, up from $261 million in the same period last year, representing a 54% increase[152] - Core operating income (Non-GAAP) for the nine months ended May 31, 2025, was $1,101 million, compared to $1,187 million for the same period in 2024, reflecting a decrease of 7.2%[152] - Adjusted free cash flow (Non-GAAP) for the nine months ended May 31, 2025, was $813 million, an increase from $636 million in the prior year, marking a 27.8% growth[153] Segment Performance - Intelligent Infrastructure segment net revenue increased by 51%, driven by a 40% increase in cloud and data center infrastructure revenues and a 13% increase in capital equipment revenues[125] - The Connected Living and Digital Commerce segment net revenue decreased by 7% due to a 7% decrease in revenues from existing customers[125] - The Regulated Industries segment accounted for 39% of net revenue for the three months ended May 31, 2025, down from 45% in the same period in 2024[127] Expenses and Charges - Selling, general and administrative expenses for the three months ended May 31, 2025, increased to $274 million from $268 million in the same period in 2024[129] - Research and development expenses for the three months ended May 31, 2025, were $7 million, consistent with 0.1% of net revenue, compared to $9 million for the same period in 2024[131] - Amortization of intangibles increased to $17 million for the three months ended May 31, 2025, from $12 million in the same period of 2024, primarily due to acquisitions[132] - Restructuring, severance, and related charges decreased to $16 million for the three months ended May 31, 2025, from $55 million in the same period in 2024[134] - Other expense increased to $30 million for the three months ended May 31, 2025, compared to $22 million in the same period of 2024[144] Cash Flow and Capital Expenditures - Net cash provided by operating activities for the nine months ended May 31, 2025, was $1,052 million, compared to $1,181 million for the same period in 2024[178] - Net cash used in investing activities during the nine months ended May 31, 2025, was $(578) million, primarily due to acquisitions and capital expenditures[180] - The company anticipates net capital expenditures for Fiscal Year 2025 to be in the range of 1.5% to 2.0% of net revenue[182] Acquisitions and Divestitures - The acquisition of Pharmaceutics International, Inc. was completed for a cash consideration of $309 million, enhancing the company's service offerings in regulated industries[155] - The company signed a binding share purchase agreement for the acquisition of Rebound Technologies Group Holdings Limited, a global supply chain service provider, on June 2, 2025[154] - The divestiture of the Mobility Business resulted in a pre-tax gain of $942 million for the fiscal year ended August 31, 2024[163] - The company incurred transaction and disposal costs of approximately $67 million related to the sale of the Mobility Business during the fiscal year ended August 31, 2024[163] Debt and Financing - Total notes payable as of May 31, 2025, amounted to $2,884 million, reflecting a slight increase from $2,880 million as of August 31, 2024[167] - As of May 31, 2025, the company had $4.0 billion in available unused borrowing capacity under existing revolving credit facilities, with $3.2 billion available under the Existing Credit Facility[168] - The company entered into a new senior unsecured credit agreement on June 18, 2025, providing a five-year revolving credit facility of $3.2 billion, potentially increaseable by up to $1.0 billion[169] Share Repurchase and Warrants - The company repurchased 6.5 million shares for $975 million under the 2025 Share Repurchase Program as of May 31, 2025[184] - The company repurchased a total of 2,221,905 shares of common stock during the three months ended May 31, 2025, at an average price of $137.87 per share[196] - The Board of Directors authorized a share repurchase program of up to $1.0 billion in September 2024[196] - The company issued a warrant to Amazon.com NV Investment Holdings LLC for up to 1,158,539 ordinary shares at an initial exercise price of $137.77 per share, with 59,582 shares vested upon issuance[186] - As of May 31, 2025, there are 1,098,957 outstanding warrant shares, with 59,582 exercisable[189] Tax and Other Financial Metrics - Effective income tax rate for the three months ended May 31, 2025, was 23.7%, a decrease of 12.0% from 35.7% in the same period of 2024[148] - Interest expense, net decreased to $112 million for the nine months ended May 31, 2025, from $132 million in the same period of 2024, due to lower interest rates[146] - Loss on securities amounted to $46 million during the three months ended May 31, 2025, related to an impairment of an investment in Preferred Stock[143] Risk Management and Internal Controls - There were no material changes in the company's primary risk exposures or management of market risks since the last annual report[191] - The company did not identify any modifications to its internal control over financial reporting that materially affected its financial reporting for the fiscal quarter ended May 31, 2025[193] - The company’s disclosure controls and procedures were evaluated and deemed effective as of May 31, 2025[192] - The company has no material changes to its contractual obligations and commitments since August 31, 2024[190] - There were no defaults upon senior securities reported during the period[197]

Core Viewpoint - Jabil is experiencing significant growth driven by the rapid adoption of artificial intelligence (AI) technology, particularly in the data center sector [1][2][3]. Financial Performance - Jabil's fiscal 2025 third-quarter revenue increased by 16% year-over-year, while earnings rose by 35% [5]. - The company has raised its full-year revenue forecast to $29 billion from $27.9 billion [5]. - Fiscal 2025 earnings per share are now expected to be $9.33, up from the previous estimate of $8.95 [6]. AI Demand and Investment - Jabil's AI revenue is projected to grow by 50% this year, reaching $8.5 billion, which will account for nearly 30% of the company's total revenue in fiscal 2025 [7]. - The company plans to invest $500 million to enhance its cloud and AI data center infrastructure manufacturing services [7][8]. - This investment aims to improve the design and manufacturing of complex AI server racks to meet increasing power and cooling requirements [8]. Market Outlook - The AI server market is expected to grow at an annual rate of 34% through 2030, indicating a strong future demand for Jabil's offerings [9]. - Jabil's annual capital expenditures are not expected to increase due to the planned $500 million investment, which should enhance profitability [9]. Stock Performance and Valuation - Jabil's stock has gained 45% in 2025, outperforming the Nasdaq Composite index, which increased by only 1% [11]. - The stock has a forward price-to-earnings ratio of less than 20, which is lower than the Nasdaq-100 index's average of 29 [11]. - Future earnings growth could lead to a higher valuation, with projections suggesting a potential stock price of $314, representing a 50% increase from current levels [12][13].

Market Overview - Wall Street is optimistic about reduced tensions in the Middle East, particularly following a cease-fire agreement between Israel and Iran announced by President Trump, which is expected to foster peace [1] - The Nasdaq index increased by 1.5% on Tuesday morning, continuing a strong performance from Monday, while oil prices have been declining [1] - Investors are focusing on avoiding major conflicts, which allows them to concentrate on cooling inflation, trade agreements, and the potential for robust second-quarter earnings [1][2] Investment Strategy - The market is approaching all-time highs as it enters July and the Q2 earnings season, with bullish sentiment prevailing despite potential short-term volatility [2] - Investors are encouraged to utilize a Zacks screen to identify top-performing Zacks Rank 1 (Strong Buy) stocks to enhance their portfolios [2][3] Zacks Rank 1 Stocks - Zacks Rank 1 stocks have historically outperformed the market, averaging an annual return of approximately 24.4% since 1988 [5] - There are over 200 stocks that hold a Zacks Rank 1 at any time, necessitating the use of filters to narrow down the list to more manageable options [3] Jabil Inc. (JBL) Highlights - Jabil Inc. is identified as a strong long-term buy, particularly due to its recent strong Q3 FY25 earnings report, which exceeded estimates by 10% and led to an upward revision of guidance [9][10] - The company plans to invest around $500 million to enhance its manufacturing capabilities in the Southeast, supporting cloud and AI data center infrastructure [9] - Jabil's Intelligent Infrastructure segment is a key growth driver, benefiting from increasing demand driven by AI [9][10] Financial Performance - Jabil is projected to grow adjusted earnings by 10% in FY25 and 19% in FY26, with revenue expected to increase by 1% in FY25 and 6% in FY26 [10] - The stock has appreciated 860% over the past decade, significantly outperforming the tech sector, and has seen an 85% increase in the last 12 months compared to the tech sector's 8% [11] - Despite its strong performance, Jabil trades at a 15% discount to the tech sector, with a forward P/E ratio of 22.4X [11]

Group 1: Jabil (JBL) - Jabil is one of the largest global suppliers of electronic manufacturing services with a Zacks Rank 1 (Strong Buy) [1] - The Zacks Consensus Estimate for Jabil's current year earnings increased by 2.1% over the last 60 days [1] - Jabil's shares gained 39% over the last three months compared to the S&P 500's gain of 4.6%, and it has a Momentum Score of A [1] Group 2: Wheaton Precious Metals (WPM) - Wheaton Precious Metals is one of the largest precious metal streaming companies globally, also holding a Zacks Rank 1 [2] - The Zacks Consensus Estimate for Wheaton's current year earnings increased by 5.5% over the last 60 days [2] - Wheaton's shares gained 20.9% over the last three months compared to the S&P 500's gain of 4.6%, and it has a Momentum Score of A [2] Group 3: Triple Flag Precious Metals Corp. (TFPM) - Triple Flag Precious Metals is a gold-focused streaming and royalty company with a Zacks Rank 1 [3] - The Zacks Consensus Estimate for Triple Flag's current year earnings increased by 4% over the last 60 days [3] - Triple Flag's shares gained 29.7% over the last three months compared to the S&P 500's gain of 4.6%, and it has a Momentum Score of A [3]

Group 1: Momentum Investing Overview - Momentum investing involves following a stock's recent trend, with the aim of buying high and selling higher, capitalizing on established price movements [1] - The Zacks Momentum Style Score helps identify stocks with strong momentum characteristics, with Jabil (JBL) currently holding a Momentum Style Score of A [2][3] Group 2: Jabil's Performance Metrics - Jabil's shares have increased by 17.27% over the past week, significantly outperforming the Zacks Electronics - Manufacturing Services industry, which rose by 4.08% during the same period [5] - Over the past quarter, Jabil's shares have surged by 51.63%, and over the last year, they have gained 82.17%, while the S&P 500 only increased by 5.61% and 10.35%, respectively [6] - The average 20-day trading volume for Jabil is 1,570,197 shares, indicating a bullish trend as the stock is rising with above-average volume [7] Group 3: Earnings Outlook - In the past two months, two earnings estimates for Jabil have been revised upwards, with no downward revisions, leading to an increase in the consensus estimate from $8.93 to $9.12 [9] - For the next fiscal year, two estimates have also moved upwards, with no downward revisions, indicating positive earnings momentum [9] Group 4: Conclusion - Jabil is rated as a 2 (Buy) stock with a Momentum Score of A, making it a strong candidate for investors looking for potential short-term gains [10]

Core Insights - Jabil Inc. (JBL) demonstrated year-over-year improvements in most of its financial metrics, indicating positive short-term performance [1] - However, the company underperformed over a longer nine-month period and in the latest trailing results, suggesting potential challenges in sustaining growth [1] Financial Performance - The latest financial results showed improvements in both top and bottom lines year-over-year [1] - Despite the positive short-term results, the longer-term performance over nine months indicates a decline or stagnation [1]

Core Viewpoint - Jabil Inc. has demonstrated strong fiscal third-quarter results, making it a notable investment opportunity amidst a quiet earnings season and geopolitical tensions in the Middle East [1] Group 1: Customer Base - Jabil serves a diverse range of major global companies, with Apple and Amazon being two of its largest clients [2] - The company has diversified its customer base, including significant clients like Johnson & Johnson and Ericsson [3] Group 2: Financial Performance - In Q3, Jabil's sales increased by 15% year over year to $7.82 billion, exceeding estimates by 10% [4] - Q3 EPS rose by 35% to $2.55, surpassing earnings expectations by 9% [4] - Jabil has consistently outperformed earnings expectations for 21 consecutive quarters, with an average earnings surprise of 6.68% over the last four quarters [5] Group 3: Guidance and Outlook - For Q4, Jabil anticipates sales between $7.1 billion and $7.8 billion, with a consensus estimate of $7.55 billion indicating 8% growth [6] - Expected Q4 EPS is projected between $2.64 and $3.04, with current projections at $2.75, reflecting a 19% growth [6] - Jabil expects continued revenue growth, margin enhancement, and strong free cash flow generation, aligning with trends such as AI [8] Group 4: Stock Performance and Valuation - Year-to-date, Jabil's stock has risen over 40%, significantly outperforming broader market indexes [9] - Over the last three years, Jabil's stock has gained more than 200%, outpacing major tech customers and benchmark indices [9] - Despite strong performance, Jabil trades at a slight discount to the benchmark with a forward P/E of 22.9X, lower than many high-performing tech stocks [10] Group 5: Conclusion and Future Prospects - Jabil holds a Zacks Rank 2 (Buy) as earnings estimates trend higher following strong Q3 results [11] - The company is projected to generate over $1.2 billion in free cash flow this year and maintains a healthy balance sheet with a debt to core EBITDA ratio of approximately 1.4X [11] - Jabil is set to complete a $1 billion share repurchase plan, indicating management's confidence in sustained operational performance [12]

Group 1 - CyberAgent (CYGIY) is a notable stock in the Computer and Technology sector, which consists of 608 individual stocks and holds a Zacks Sector Rank of 4 [2] - The Zacks Rank system focuses on earnings estimates and revisions, with CyberAgent currently holding a Zacks Rank of 2 (Buy) and a 26.7% increase in the full-year earnings estimate over the past 90 days, indicating improved analyst sentiment [3] - Year-to-date, CyberAgent has returned approximately 55.2%, significantly outperforming the average sector return of 1.5% [4] Group 2 - CyberAgent is part of the Internet - Services industry, which includes 36 stocks and is currently ranked 142 in the Zacks Industry Rank, with this group experiencing a loss of about 6.9% year-to-date, further highlighting CyberAgent's strong performance [5] - Another stock in the Computer and Technology sector, Jabil (JBL), has also outperformed the sector with a year-to-date return of 42.2% and a Zacks Rank of 2 (Buy) [4][5] - The Electronics - Manufacturing Services industry, which includes Jabil, has seen a year-to-date increase of 31.2%, with Jabil's EPS estimate rising by 3.2% over the past three months [5][6]

Core Insights - Jabil Inc. reported better-than-expected third-quarter results with adjusted earnings per share of $2.55, surpassing the analyst consensus estimate of $2.31, and quarterly sales of $7.83 billion, exceeding the consensus estimate of $7.06 billion [1] Financial Projections - For the fourth quarter, Jabil projects net revenues between $7.10 billion and $7.80 billion, compared to a consensus of $7.19 billion, and anticipates adjusted EPS of $2.64 to $3.04 against a consensus of $2.74 [2] - For fiscal 2025, Jabil expects revenues of $29.0 billion, above the consensus of $28.0 billion, and anticipates adjusted EPS of $9.33, exceeding the consensus of $8.97 [3] Stock Performance - Following the earnings announcement, Jabil shares rose by 4.1% to trade at $204.98 [3] Analyst Ratings and Price Targets - UBS analyst David Vogt maintained a Neutral rating and raised the price target from $157 to $208 [5] - JP Morgan analyst Samik Chatterjee maintained an Overweight rating and increased the price target from $180 to $214 [5] - Goldman Sachs analyst Mark Delaney maintained a Buy rating and raised the price target from $188 to $215 [5] - Raymond James analyst Melissa Fairbanks reiterated a Strong Buy rating and increased the price target from $170 to $230 [5]