JBL Q4 Deep Dive: Data Center and AI Demand Drive Broad-Based Growth

Electronics manufacturing services provider Jabil (NYSE:JBL) reported Q4 CY2025 results exceeding the market’s revenue expectations, with sales up 18.7% year on year to $8.31 billion. Guidance for next quarter’s revenue was optimistic at $7.75 billion at the midpoint, 2.6% above analysts’ estimates. Its non-GAAP profit of $2.85 per share was 4.4% above analysts’ consensus estimates.

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StockStory’s Take

Jabil’s fourth quarter delivered results that met Wall Street’s expectations, with strength attributed to robust demand in its Intelligent Infrastructure segment and steady contributions from Regulated Industries and Connected Living and Digital Commerce. CEO Michael Dastoor credited the company’s diversified model for the performance, highlighting particularly strong execution in cloud and data center infrastructure, as well as networking. Dastoor explained, “AI continues to be the primary driver of growth, but all three segments contributed to our better-than-expected performance.” Management also pointed to operational discipline and a healthy pipeline as factors supporting the quarter’s results.

Looking ahead, Jabil’s updated guidance relies on continued momentum in its data center and AI-related businesses, underpinned by recent program wins with hyperscale customers and the integration of new capabilities from acquisitions like Hanley Energy. Management expects further growth in health care and renewables, while remaining appropriately cautious on automotive. Dastoor emphasized, “The strength we’re seeing here clearly validates our strategy,” and suggested that the company’s investments in advanced cooling and power management position it well for upcoming demand in next-generation data centers. The company is also planning for incremental revenue from automation, robotics, and warehouse programs.

Key Insights from Management’s Remarks

Management attributed the quarter’s results to strong demand in AI and data center infrastructure, recent wins with hyperscale customers, and execution on segment-specific initiatives.

• AI and data center momentum: Intelligent Infrastructure led growth, with significant contributions from cloud and data center infrastructure as well as networking. The company ramped programs for a second hyperscale customer in Mexico and saw robust results from its Memphis data center power operations.
• Segment diversification: Regulated Industries delivered steady growth, particularly in health care and renewables, while Connected Living and Digital Commerce performed ahead of expectations due to strength in automation, robotics, and retail warehouse solutions.
• Advanced cooling and power integration: Jabil is advancing retrofits and investments in liquid cooling and modular power systems for data centers, leveraging the Mikros and Hanley Energy acquisitions to enhance its offering in thermal management and power distribution.
• Capacity and operational leverage: Higher capacity utilization—moving from 75% closer to 80%—and disciplined cost management supported stable operating margins, with operating leverage driven by incremental revenue and a strong business mix.
• Healthy pipeline and M&A strategy: Management described an “extremely strong” business pipeline, especially in health care and regulated markets, and is actively exploring M&A opportunities to add vertical capabilities, particularly in high-margin areas like drug delivery and chronic disease management.

Drivers of Future Performance

Jabil’s outlook is shaped by continued strength in AI-enabled infrastructure, expansion in health care and renewables, and disciplined operational management.

• AI infrastructure and hyperscale wins: Management expects ongoing demand for AI-capable data centers, with new program ramps for additional hyperscale customers and expanded offerings in liquid cooling and modular power systems. The Hanley Energy acquisition is expected to be modestly accretive this year and more impactful in the next.
• Health care and regulated market expansion: The company anticipates health care to be a steady multiyear growth engine, supported by new product introductions in chronic disease management and ongoing customer consolidation. Management is also evaluating M&A opportunities to strengthen vertical integration and drive higher-margin business.
• Operational discipline and margin focus: Jabil plans to maintain margin expansion through improved business mix, increased capacity utilization, and SG&A (selling, general, and administrative) leverage. Management signaled that while capital expenditures may rise slightly, consistent cash generation and prudent working capital management remain priorities.

Catalysts in Upcoming Quarters

In the coming quarters, the StockStory team will watch for (1) the scale and profitability of new hyperscale and data center customer ramps, (2) execution on health care and regulated markets M&A to bolster high-margin growth, and (3) the integration and impact of Hanley Energy’s modular power systems. Developments in automation and warehouse robotics, as well as progress on advanced cooling retrofits, will also be important signposts.

Jabil currently trades at $216.83, up from $212.56 just before the earnings. In the wake of this quarter, is it a buy or sell? The answer lies in our full research report (it’s free for active Edge members).

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