Jabil (JBL): Is the AI-Driven Growth Story Fully Priced?

The question of whether Jabil (JBL)'s AI-driven growth story is fully priced hinges on a delicate balance between its aggressive revenue projections, valuation multiples, and the broader dynamics of the AI sector. With the company recently raising its full-year revenue guidance to $32.4 billion for 2026-a $1.1 billion increase from prior estimates-investors are scrutinizing whether JBL's current valuation reflects both its near-term momentum and the long-term sustainability of its AI infrastructure bets.

Valuation Metrics: A Tale of Two Multiples

JBL's trailing P/E ratio of 35.6x appears elevated relative to the U.S. electronics industry average of 24.9x according to industry benchmarks, yet its forward P/E of 19.37 suggests a more modest valuation when accounting for projected earnings. This discrepancy underscores the importance of growth expectations. Analysts project JBL's AI-related revenue to surge 35% year-over-year in 2026, reaching $12.1 billion, driven by its Intelligent Infrastructure segment, which now accounts for 46% of total revenue and has grown 54% year-over-year. Such growth rates justify a premium valuation, particularly in a sector where demand for cloud and data center infrastructure is outpacing supply.

However, JBL's forward P/E of 19.37 lags behind the AI sector's average forward P/E of 36.14 which reflects a broader willingness among investors to pay for AI-related growth. This gap implies that JBL's valuation is not yet fully aligned with the sector's optimism, despite its robust performance. For context, the Nasdaq Composite's AI-focused components trade at a forward P/E of 29.28 according to Reuters, while the S&P 500 Information Technology Index commands 30.4x as reported by Reuters. JBL's forward multiple, while lower than these benchmarks, remains elevated compared to historical averages for the tech sector according to stock analysis.

Sector Divergence and JBL's Strategic Position

The AI sector in Q4 2025 has exhibited significant divergence. While demand for high-performance computing and data center infrastructure remains robust, concerns persist about whether the productivity gains from AI investments will justify the capital outlays. JBL's focus on thermal management, liquid cooling, and power distribution-critical components for next-generation data centers-positions it to benefit from this divergence. Its acquisition of Hanley Energy and capacity utilization improvements (now approaching 80%) further strengthen its competitive edge.

Yet, JBL's growth is not without risks. The company's Intelligent Infrastructure segment, which drives much of its AI-related revenue, faces competition from vertically integrated tech giants like Microsoft and Amazon, which are increasingly controlling their own infrastructure. While JBL's 35% AI revenue growth outpaces the sector's average, it must navigate a landscape where margins in infrastructure services are often compressed.

Guidance Realism and Analyst Sentiment

JBL's raised guidance for 2026-$32.4 billion at the midpoint- rests on continued demand for AI infrastructure and healthcare solutions. This optimism is echoed by analysts, who assign a "Moderate Buy" rating and average price target of $261.29, implying a 16.36% upside from its current price. However, these targets assume that JBL's core operating margin of 5.7% can be sustained, a challenge given the capital intensity of its AI infrastructure projects.

The company's Q1 2026 results, which delivered $8.3 billion in revenue and core earnings per share above estimates, provide some validation for its guidance. Yet, the AI sector's broader valuation exuberance-reflected in a 36.14 forward P/E according to BlackRock-suggests that investors are pricing in growth scenarios that may not materialize uniformly across all sub-sectors.

Conclusion: A Growth Story, But at What Cost?

JBL's AI-driven growth story is compelling but not yet fully priced. Its forward P/E of 19.37 is a discount to the AI sector's average, indicating room for re-rating if its 35% AI revenue growth is sustained. However, the company's valuation realism depends on two key factors: (1) whether its Intelligent Infrastructure segment can maintain its 54% year-over-year growth amid rising competition, and (2) whether the AI sector's broader productivity gains justify its elevated multiples.

For now, JBL appears to offer a balanced proposition. It combines the growth potential of AI infrastructure with a valuation that, while elevated, is not as stretched as some of its peers. As the sector navigates macroeconomic headwinds and regulatory scrutiny according to industry analysis, JBL's operational leverage and strategic acquisitions may provide a buffer. Yet, investors should remain cautious: the line between justified optimism and speculative excess in AI is thin, and JBL's story will need to deliver on its promises to justify its current price.