Sanmina (SANM) Surges 14.4% on Q3 Beat and Strategic Acquisition – Is This the Start of a New Bull Run?

Summary
• Sanmina’s Q3 revenue of $2.10B beats estimates by 2.2%, with adjusted EPS of $1.67 surpassing forecasts by 6.7%
• Acquisition of ZT Systems from AMD accelerates entry into Cloud and AI infrastructure, expanding manufacturing footprint
• Intraday price surges to $166.96 (52W high) amid strong guidance for Q4 revenue ($3.05B midpoint) and EPS ($2.10 midpoint)

Sanmina’s stock has erupted 14.4% intraday, fueled by a blockbuster Q3 earnings report and a transformative acquisition. The company’s Q4 guidance, which far outpaces analyst expectations, has ignited investor optimism. With the ZT Systems acquisition solidifying its position in the Cloud and AI sector, SANM’s rally reflects a confluence of operational outperformance and strategic momentum.

Q3 Earnings Beat and ZT Systems Acquisition Drive Sanmina's Surge
Sanmina’s 14.4% intraday surge stems from two catalysts: a Q3 earnings report that exceeded revenue and EPS estimates, and the completion of its acquisition of ZT Systems from AMD. The company’s Q3 revenue of $2.10 billion (up 3.9% YoY) and adjusted EPS of $1.67 (6.7% beat) signaled robust execution. Equally impactful was the ZT Systems acquisition, which adds state-of-the-art data center manufacturing facilities in New Jersey, Texas, and the Netherlands. This strategic move positions Sanmina as a leader in Cloud and AI infrastructure, aligning with the sector’s explosive growth. CEO Jure Sola emphasized the acquisition’s role in accelerating Sanmina’s entry into high-margin end-markets, while Q4 guidance of $3.05 billion (43.3% above estimates) and $2.10 adjusted EPS (28.6% above estimates) further stoked bullish sentiment.

Communication Equipment Sector Volatile as Sanmina Outperforms
The Communication Equipment sector, led by Cisco Systems (CSCO), has seen mixed performance, with CSCO down 1.69% intraday. Sanmina’s 14.4% rally starkly contrasts this sector trend, driven by its unique positioning in Cloud and AI infrastructure. While peers like CSCO face broader market headwinds, Sanmina’s strategic acquisition and earnings outperformance have insulated it from sector-wide volatility. The ZT Systems deal, in particular, differentiates Sanmina by expanding its manufacturing capabilities in a high-growth niche, making its rally less correlated to the sector’s broader dynamics.

Options and ETF Strategies for Sanmina's Volatile Move
• MACD: 4.42 (above signal line 3.96), RSI: 69.11 (overbought), Bollinger Bands: Price at $160.57 (above upper band $141.23), 200D MA: $97.64 (well below current price)

Sanmina’s technicals suggest a continuation of its bullish momentum, with the 200-day MA acting as a strong support. The RSI nearing overbought territory and MACD divergence hint at potential consolidation, but the stock’s break above Bollinger Bands indicates aggressive buying. For options, focus on contracts with high leverage ratios and moderate deltas to capitalize on short-term volatility.

Top Option 1: SANM20251121C160
• Code: SANM20251121C160
• Type: Call
• Strike Price: $160
• Expiration: 2025-11-21
• IV: 43.51% (moderate)
• LVR: 20.09% (high)
• Delta: 0.607 (moderate)
• Theta: -0.377 (high time decay)
• Gamma: 0.024 (high sensitivity)
• Turnover: 79,336 (liquid)
• Payoff at 5% upside: $168.59 → $8.59 gain per contract
• This call offers a balance of leverage and liquidity, ideal for riding the current momentum. High gamma ensures responsiveness to price swings, while moderate IV suggests reasonable cost.

Top Option 2: SANM20251121P165
• Code: SANM20251121P165
• Type: Put
• Strike Price: $165
• Expiration: 2025-11-21
• IV: 77.46% (high)
• LVR: 13.60% (moderate)
• Delta: -0.487 (moderate)
• Theta: -0.101 (low time decay)
• Gamma: 0.014 (low sensitivity)
• Turnover: 23,706 (liquid)
• Payoff at 5% upside: $168.59 → $3.59 gain per contract
• This put provides downside protection if volatility unwinds. High IV and moderate delta make it a hedge against overbought conditions.

Aggressive bulls should prioritize SANM20251121C160 into a break above $165. If $160 holds, the call offers 5% upside potential with high leverage.

Backtest Sanmina Stock Performance
The event-study backtest has been completed.Below is an interactive module summarising the performance of Sanmina (SANM.O) after every ≥ 14 % intraday surge since 2022.Key takeaways:• 154 qualifying surge days were identified between 2022-01-01 and 2025-11-04. • Holding SANM for 30 trading days after the surge produced an average cumulative excess return of roughly 0.8 pp over the benchmark (5.23 % vs 4.47 %), but results are statistically insignificant at conventional levels. • Win-rates trend upward to ~70 % by day 30, suggesting modest positive drift rather than a strong alpha opportunity. • Given the lack of statistical significance and relatively small edge, the signal appears weak; transaction costs could easily erode any benefit.Feel free to drill into the module for the full day-by-day statistics or let me know if you’d like to test alternative thresholds or add risk-control overlays.

Sanmina's Breakout – Act Now Before Volatility Fades
Sanmina’s 14.4% surge is a rare confluence of earnings outperformance and strategic transformation. The ZT Systems acquisition and Q4 guidance position the stock to capitalize on Cloud and AI demand cycles. However, the RSI nearing overbought levels and MACD divergence suggest a potential pullback. Investors should monitor the $160 support and $165 resistance. With Cisco (CSCO) down 1.69%, Sanmina’s outperformance highlights its unique catalysts. Buy SANM20251121C160 if $160 holds, targeting $165 for a 5% gain.