TLDR
- UBS upgraded Jabil to Buy from Neutral, keeping its $430 price target, implying ~28% upside
- JBL stock rose 3.4% to $348.22 on Tuesday, putting it among the top S&P 500 performers
- UBS forecasts AI-related revenue growing 50% to $20.3 billion in fiscal 2027, up from $13.5 billion
- Amazon, Meta, and Google are the key hyperscaler customers driving growth expectations
- Amazon is singled out as Jabil’s largest AI partner, with plans to accelerate Graviton CPU and Trainium ASIC deployment
Jabil stock jumped 3.4% to $348.22 on Tuesday after UBS analyst David Vogt upgraded the stock to Buy from Neutral, keeping his price target at $430. That target implies about 28% upside from current levels.
The upgrade ended a two-day losing streak for JBL and placed it among the best performers in the S&P 500, which itself slipped 0.1% on the day.
Vogt cited a “multi-year growth cycle fueled by AI investment from Amazon, Meta, and Google” as the core reason for the upgrade.
UBS raised its fiscal 2027 EPS estimate to $16.78 from $15.89, and its fiscal 2028 estimate to $20.24 from $18.34. Revenue estimates for both years were lifted by roughly 6%.
The bank expects AI-related revenue to hit $20.3 billion in fiscal 2027, up from $13.5 billion in fiscal 2026. That’s a jump of at least 50%.
Amazon and Meta are each expected to contribute roughly $1 billion in incremental revenue. UBS believes Google will add another growth tailwind later in fiscal 2027.
Amazon gets the top billing in UBS’s thesis.
“Amazon, Jabil’s largest AI partner, plans to accelerate deployment of its Graviton CPUs and Trainium AI ASICs over the next several years,” Vogt wrote.
Supply chain checks pointing to stronger-than-expected demand were a key input behind the raised estimates.
Expansion Fueling the Outlook
Capacity expansion at Jabil’s Memphis and North Carolina facilities is expected to support the growing hyperscaler demand. The recently completed Hanley acquisition is also seen as an incremental revenue contributor.
UBS expects Jabil’s operating margin to rise to around 6% in fiscal 2027, up from an estimated 5.8% in fiscal 2026.
The bank also flagged healthcare as a secondary growth driver, with Jabil’s Croatia facility coming online to meet rising demand. Automation and robotics investments are expected to improve both growth and margins over time.
Where Valuation Stands
UBS lowered its valuation multiple slightly, to about 22 times from 25 times, to account for higher capital costs and a broader de-rating across AI infrastructure. Even so, the bank maintained its $430 price target.
Vogt argued the current valuation prices in roughly 9.5% 10-year EPS growth, below UBS’s own forecast of around 11%.
JBL has gained 54% in 2026 and is up 53% over the past 12 months.
In June, Jabil raised its full-year profit guidance to $12.70 per share from $12.25, and bumped revenue guidance to approximately $35 billion from $34 billion.
Management credited better-than-expected results in its automotive segment and connected living business for the raised guidance, alongside continued strength in AI infrastructure.
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