This High-Flying Artificial Intelligence (AI) Stock Plummeted Last Week. It Can Skyrocket Once Again.

Core Viewpoint - Jabil's stock dropped after its fiscal 2025 fourth-quarter results, despite stronger-than-expected performance, presenting a potential buying opportunity for investors [1][2]. Group 1: Financial Performance - Jabil reported a 15% increase in non-GAAP earnings to $9.75 per share in the previous fiscal year, with management forecasting a 13% increase to $11.00 per share for the current fiscal year [10]. - The company experienced a 17% year-over-year increase in revenue last quarter, alongside a 43% increase in earnings [6]. - Jabil's overall revenue is expected to grow by 5% in fiscal 2026, while AI revenue is projected to spike by 25% [5]. Group 2: AI Business Growth - Jabil's AI revenue surged by 80% in the previous fiscal year, reaching $9 billion, significantly outpacing the company's overall revenue growth of 3% to $29.8 billion [4]. - The AI business now accounts for 30% of Jabil's total revenue, with expectations for further growth in fiscal 2026 [5]. - The AI server market is anticipated to grow at an annual rate of nearly 39% through 2030, indicating strong long-term growth potential for Jabil's AI segment [8]. Group 3: Strategic Investments - Jabil plans to invest $500 million in a new facility in North Carolina to enhance manufacturing capabilities for cloud and AI data center components, addressing capacity constraints [7]. - The company is well-positioned to capitalize on the strong demand for AI-driven solutions, as indicated by management's comments on the latest earnings call [7]. Group 4: Valuation and Market Position - Jabil's stock trades at a forward earnings multiple of 20, which is lower than the Nasdaq-100 index's multiple of 27, suggesting potential for price appreciation [12]. - Analysts project that if Jabil achieves earnings of $14.66 per share by fiscal 2028, the stock price could increase to $396, representing an 82% upside from current levels [12][13].