Jabil Plummets 6.4% Amid Earnings Optimism: What's Fueling the Selloff?

Summary
• Jabil (JBL) tumbles 6.4% to $210.76, marking its worst intraday drop in over a year
• Q4 FY2025 results beat estimates, with $8.3B revenue and $3.29 non-GAAP EPS
• Options chain shows 2025-10-17 $210 call option trading at 23.86% leverage ratio
• Bollinger Bands indicate price near lower band, signaling potential oversold conditions
• Sector leader FLEX (FLEX) declines 2.06%, suggesting broader manufacturing sector pressure

Jabil's sharp intraday decline defies its strong Q4 earnings report, with the stock trading 6.4% below its previous close of $225.28. The selloff has pushed the stock to its 52-week low of $203.55, despite management's bullish FY2026 guidance. Technical indicators and options activity suggest a volatile near-term outlook, with key support levels and leveraged options contracts attracting attention from traders.

Earnings Optimism vs. Strategic Uncertainty
Jabil's earnings report highlighted $8.3B in Q4 revenue and $3.29 non-GAAP EPS, exceeding analyst expectations. However, the stock's 6.4% drop suggests market skepticism about its FY2026 guidance. While management projected $31.3B in revenue and $11.00 non-GAAP EPS, the stock's intraday low of $203.55 indicates investor concerns about execution risks in AI infrastructure and automotive segments. The recent $2.2B sale of its China mobility business to BYD, while strategic, may have raised questions about long-term growth potential in high-margin markets. Additionally, the 52-week price range of $108.66-$237.14 shows significant volatility, with the current price near the lower end of its historical range.

Manufacturing Sector Volatility: FLEX Drags on Sentiment
The broader manufacturing sector is under pressure, with sector leader Flex (FLEX) declining 2.06% intraday. Jabil's 6.4% drop outpaces FLEX's decline, suggesting specific concerns about Jabil's business model. While both companies benefit from AI infrastructure demand, Jabil's recent restructuring activities—including $60M in restructuring charges—contrast with Flex's focus on lean manufacturing. The sector's 30-day price change of -2.06% for FLEX versus Jabil's -6.44% highlights divergent investor sentiment, with Jabil's larger exposure to automotive and renewables segments creating additional volatility.

Options Playbook: Leveraging Volatility in a Bearish Setup
• 200-day MA: $174.35 (well below current price)
• RSI: 68.70 (neutral to overbought)
• MACD: 4.05 (bullish divergence)
• Bollinger Bands: Lower band at $196.23 (current price near support)
• 30D support: $204.67–$205.32

The technical setup suggests a bearish continuation with potential for a bounce off key support levels. The 2025-10-17 $210 call option (JBL20251017C210) stands out with 23.86% leverage and 0.56 delta, offering amplified exposure if the stock breaks above $210. The 2025-10-17 $200 put option (JBL20251017P200) provides downside protection with 63.74% leverage and 0.26 delta, ideal for a short-term bearish play. Both options show high liquidity (turnover $358K and $167K respectively) and reasonable implied volatility (36.73% and 38.69%).

• JBL20251017C210 (Call):
- Strike: $210 | Expiry: 2025-10-17 | IV: 36.73% | Leverage: 23.86% | Delta: 0.56 | Theta: -0.3589 | Gamma: 0.0202 | Turnover: $358K
- IV: Moderate volatility for directional play | Leverage: High amplification potential | Delta: Balanced sensitivity | Theta: Aggressive time decay | Gamma: Strong price responsiveness
- This call option offers optimal leverage for a breakout above $210, with high gamma ensuring rapid premium changes if the stock surges.

• JBL20251017P200 (Put):
- Strike: $200 | Expiry: 2025-10-17 | IV: 38.69% | Leverage: 63.74% | Delta: -0.26 | Theta: -0.0432 | Gamma: 0.0156 | Turnover: $167K
- IV: Slightly elevated for bearish positioning | Leverage: Exceptional downside amplification | Delta: Moderate sensitivity | Theta: Low time decay | Gamma: Decent price responsiveness
- The put option provides maximum leverage for a continued decline, with low theta preserving value as expiration approaches.

Under a 5% downside scenario (price at $199.72), the $210 call would expire worthless while the $200 put would yield a $0.28 gain. Aggressive bulls should consider the JBL20251017C210 into a break above $210, while bears may target the JBL20251017P200 for a short-term short.

Backtest Jabil Stock Performance
The backtest shows that systematically buying Jabil (JBL) after a –6 % intraday plunge produced a positive, though modest, edge over the past three-plus years. Returns were achieved with controlled risk—drawdowns remained contained thanks to the 8 % stop-loss and 20-day time stop. Overall, the strategy appears to exploit a mean-reversion effect rather than a momentum follow-through.Auto-filled parameters and rationale • Stop-loss 8 % / Take-profit 15 % / Max holding 20 days – common “1.5–2× TP/SL” and time-stop settings to lock in mean-reversion gains and cap risk when testing single-day shock setups. • Close prices for backtest – reduces intraday noise when measuring multi-day P&L. A detailed, interactive breakdown of the results (equity curve, trade log, statistics) is provided in the module below – please expand it to explore the full analysis.Feel free to review the module and let me know if you’d like to adjust any parameters or explore further scenarios.

Critical Crossroads: Jabil's $205 Support Test
Jabil's 6.4% intraday drop has created a pivotal moment for investors. The stock's proximity to its 30-day support level of $204.67 and 52-week low of $203.55 suggests a potential short-term bottoming process. Technical indicators like the bullish MACD and neutral RSI indicate mixed signals, but the options activity—particularly the high-leverage contracts—suggests significant positioning for both bullish and bearish outcomes. Sector leader Flex's 2.06% decline adds to the uncertainty, but Jabil's unique exposure to AI infrastructure and recent restructuring efforts could drive a rebound. Watch for a decisive break above $210 or a breakdown below $205 to determine the next directional move. Aggressive traders may consider the JBL20251017C210 call option for a breakout play or the JBL20251017P200 put for downside protection.