Flex vs. Jabil: Which EMS Stock Offers Better Risk-Adjusted Growth Potential in 2026?

The global electronics manufacturing services (EMS) sector is undergoing a transformative shift, driven by the rapid adoption of artificial intelligence (AI) and the escalating demand for data center infrastructure. As investors seek to allocate capital in this high-growth arena, the comparative risk-adjusted performance of key players like Flex Ltd. (FLEX) and Jabil Inc. (JBL) becomes critical. This analysis evaluates both companies through the lenses of historical risk metrics, 2026 growth projections, and AI-driven investment signals to determine which offers a more compelling risk-return profile.

Risk-Adjusted Performance: Jabil Outpaces Flex

Risk-adjusted returns remain a cornerstone of prudent investment decisions, particularly in volatile sectors like AI infrastructure. As of December 31, 2025, Jabil demonstrated superior risk efficiency, with a Sharpe Ratio of 3.31 and a Sortino Ratio of 3.20, significantly outperforming Flex's 1.31 and 1.78. These metrics indicate that Jabil generates higher returns per unit of risk and is more effective at mitigating downside volatility. Additionally, Jabil's Calmar Ratio (2.77) and Martin Ratio (10.79) further underscore its ability to balance returns with risk, compared to Flex's 1.62 and 5.48.

However, Flex's lower volatility (14.07% vs. JBL's 9.67%) suggests it is inherently less volatile in price movements according to analysis. This apparent contradiction highlights the nuanced nature of risk assessment: while Flex's stock is less volatile, its lower Sharpe and Sortino ratios imply it underperforms Jabil in delivering returns relative to risk. For investors prioritizing risk-adjusted efficiency, Jabil's metrics present a stronger case.

2026 Growth Projections: AI as a Catalyst

Both companies have raised their 2026 guidance, but their strategies and execution differ. Jabil now forecasts $32.4 billion in revenue, with AI-driven Intelligent Infrastructure segment growth projected to reach $11.2 billion, a 25% year-over-year increase. This is supported by strategic investments, including a $500 million U.S. manufacturing facility and the acquisition of Hanley Energy to enhance power management solutions according to industry reports. Jabil's Q1 2026 results, with $8.3 billion in revenue and $2.85 in core diluted EPS (both exceeding estimates), validate its momentum.

Flex, meanwhile, targets $26.7–$27.3 billion in revenue, with data center revenue expected to grow 35% to $6.5 billion according to market analysis. Its AI infrastructure platform, developed in partnership with NVIDIA and LG Electronics, aims to accelerate data center deployment by 30% according to company statements. While Flex's adjusted operating margin guidance (6.2–6.3%) exceeds Jabil's 5.7%, its forward P/E ratio of 18.77 is notably lower than JBL's 34.66, suggesting it is undervalued relative to earnings according to financial analysis.

AI Sector Positioning: Strategic Divergence

Jabil's focus on AI infrastructure is evident in its Intelligent Infrastructure segment, which now accounts for a significant portion of its revenue. The company's recent introduction of the J 422G server and collaborations on battery energy storage systems further solidify its position. However, Jabil faces challenges in non-AI segments like automotive and renewable energy, which underperform.

Flex's integrated AI platform and partnerships with industry leaders position it to capitalize on energy-efficient data center solutions. Its ability to co-develop modular cooling systems with NVIDIA and LG addresses a critical pain point in AI-driven thermal management. Yet, Flex's highly leveraged balance sheet and competitive pressures from Jabil and Celestica could constrain its long-term execution.

Valuation and Profitability: A Trade-Off

Jabil's higher gross margin (8.9%) and net margin (2.3%) compared to Flex's 9.1% and 3.3% suggest stronger profitability according to financial data. However, Flex's superior free cash flow margin (4.5% vs. JBL's 3.8%) and lower forward P/E ratio indicate better value according to valuation metrics. Jabil's stock has outperformed Flex over the past year (+61% vs. +48.5%), but its elevated valuation raises questions about sustainability according to market analysis.

AI-Driven Investment Signals: Machine Learning Insights

Machine learning models reinforce Jabil's edge in risk-adjusted growth. JBL's Sharpe and Sortino ratios remain significantly higher than FLEX's, even when accounting for AI sector-specific volatility according to portfolio analysis. Analysts project Jabil could see a 25–50% upside in 2026, driven by its AI infrastructure momentum according to investment research. Flex, while undervalued, faces execution risks tied to its debt load and competitive landscape according to market analysis.

Conclusion: Balancing Risk and Reward

For investors prioritizing risk-adjusted returns, Jabil's superior Sharpe and Sortino ratios, coupled with its AI-driven growth trajectory, make it the more compelling choice. Its strategic investments and strong Q1 performance validate its ability to capitalize on AI infrastructure demand. Flex, while offering better value and margin expansion, carries higher execution risks and underperforms Jabil in risk efficiency.

However, the decision is not binary. Flex's lower valuation and operational improvements could appeal to risk-tolerant investors seeking upside potential. Ultimately, Jabil's balanced approach to risk and growth in the AI sector positions it as the stronger candidate for 2026.