This Underrated Artificial Intelligence (AI) Infrastructure Stock Has Surged 80% in a Year. It Can Still Surge 53%.

The artificial intelligence (AI) data center boom has been a tailwind for several companies, including chipmakers, server manufacturers, memory manufacturers, and networking component providers. Contract electronics manufacturer Jabil (NYSE: JBL) has also benefited from the terrific growth of the AI data center market, with its shares rising an impressive 80% in the past year.

Though Jabil may not be as famous as some of its peers in the AI infrastructure space, the company's growth rate has been picking up due to strong demand for its data center solutions. It manufactures server racks, liquid-cooling solutions, and power management products for data centers. The huge investments in AI data centers explain why Jabil on March 18 reported solid results for its fiscal 2026's second quarter (ended Feb. 28).

Let's take a closer look at its latest quarterly report and check why this tech stock can soar higher even after clocking impressive gains in the past year.

Image source: Getty Images.

Jabil's beat-and-raise quarterly report points toward better times

Jabil's fiscal Q2 revenue jumped by 23% year over year to $8.3 billion. The company's intelligent infrastructure business, which accounts for half of its top line, was the driving force behind its solid top-line increase. This segment comprises Jabil's cloud and data center infrastructure business, networking and communications, and semiconductor capital equipment. Not surprisingly, Jabil witnessed a 52% year-over-year increase in this segment's revenue.

Additionally, the intelligent infrastructure business's operating margin increased by 40 basis points from the year-ago period, driven by an improved product mix and cost discipline. As a result, Jabil's adjusted earnings shot up by 39% year over year to $2.69 per share. The numbers were well ahead of analysts' expectations.

Even better, Jabil has raised its full-year guidance. It now expects fiscal 2026 revenue to land at $34 billion, up from the prior estimate of $34 billion. Jabil has also increased its fiscal 2026 earnings per-share estimate to $12.25 per share from $11.55 per share, suggesting a 25% increase over the previous fiscal year.

The improving traction of Jabil's AI business explains its upbeat forecast. The company now anticipates a 46% increase in its AI revenue in fiscal 2026 to $13.1 billion, well above the 35% growth it forecast in December 2025.

The good news for investors is that Jabil is in talks with a third hyperscaler customer to build data center solutions. The company expects to close this potential new business in the next few weeks and is confident that the new customer could become a "major contributor" to its revenue in fiscal 2027.

It is worth noting that Jabil announced a $500 million investment in June last year to expand its cloud and AI data center infrastructure manufacturing operations. The company says its expansion is on track and that there are a "whole bunch of customers" looking to use its facilities.

Jabil management also notes that its capacity utilization rate, an indicator of how efficiently it uses its production facilities, continues to improve. Specifically, Jabil's capacity utilization is currently 75%, but the company believes it can increase it to 80%. As a result, the company believes it can expand its adjusted operating margin to more than 6%, up from its fiscal 2026 forecast of 5.7%.

Strong earnings growth should pave the way for more stock price upside

We have already seen that Jabil's earnings have been growing at a robust pace, and analysts expect the momentum to continue.

JBL EPS Estimates for Current Fiscal Year data by YCharts.

That's not surprising, as the AI server market is poised to grow at an annual pace of 34% through 2030. So, there is a good chance of Jabil's growth outpacing Wall Street's expectations. But even if Jabil achieves $16.50 per share in earnings in fiscal 2028 (as per consensus estimates seen in the above chart) and trades at 23 times earnings at that time (in line with the tech-laden Nasdaq-100 index's forward earnings multiple), its stock price could reach $379.

That's a potential increase of 53% from current levels, suggesting this AI stock can continue delivering more upside over the next two years or so. Moreover, with Jabil trading at 20 times forward earnings right now, it isn't too late for investors to buy it now.

Harsh Chauhan has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.