Apple Supplier Jabil Soars On Q1 Earnings Beat Fueled By Data Center Demand: Retail Gets Bullish

Shares of Jabil Inc. jumped as much as 10% in early trading on Wednesday after the manufacturing solutions provider reported first-quarter results that surpassed Wall Street expectations. 

The manufacturing services and solutions provider’s performance was fueled by strong demand in its intelligent infrastructure and data center markets, lifting retail sentiment around the stock.

Jabil posted net revenue of $6.9 billion, beating analysts’ estimates of $6.6 billion. 

However, revenue fell 17% from the $8.3 billion reported in the same quarter last year, reflecting the company’s ongoing transition, including its mobility business divestiture for $2.2 billion in fiscal 2024. 

Earnings per share (EPS) came in at $2, above the consensus estimate of $1.88, according to Stocktwits data.

Jabil, a key supplier to Apple, makes electronic components, including circuit board assemblies and systems for automotive, cloud services, commercial drones, trucks and buses.

Its intelligent infrastructure segment was a standout, growing 5% year over year to account for 36% of total revenue. Jabil attributed this growth to robust demand in the cloud, data center infrastructure, and warehouse automation markets. 

“We did see solid year-on-year growth across our cloud, semi cap, and warehouse automation markets,” said Greg Hebert, Jabil’s Chief Financial Officer, during the earnings call.

In contrast, connected living and digital commerce, which contributed 22% of revenue, saw a 46% year-over-year decline. 

Similarly, revenue from regulated industries, comprising nearly half of Jabil's total revenue, dipped 7% year-over-year, reflecting challenges in renewable energy and electric vehicle (EV) markets.

Jabil Sentiment and Message Volume on Dec 18 as of 9:50 a.m. ET | Source: Stocktwits

On Stocktwits, retail sentiment around the stock jumped to ‘extremely bullish’ from ‘neutral’ a day ago while message volume spiked within ‘extremely high’ levels. 

One user even accurately predicted that the stock would rise at least $10 post earnings. 

Jabil has been actively reshaping its business to focus on higher-margin, high-growth sectors. The company divested its mobility segment last year, returning most of the proceeds to shareholders through share buybacks. 

“This move not only diversified our geographic footprint but also reduced exposure to a business that required high capital investments,” said Adam Berry, Jabil’s Senior Vice President of Investor Relations.

Looking ahead, Jabil expects Q2 2025 revenue between $6.1 billion and $6.7 billion, with earnings per share ranging from $1.60 to $2. 

For the full fiscal year, the company forecasts revenue of $27.3 billion, core operating margins of 5.4%, and free cash flow of $1.2 billion.

However, Jabil also acknowledged several risks, including potential supply chain disruptions, market saturation in the automotive and EV sectors, macroeconomic headwinds, and competitive pressures on the technology development side.

Including Wednesday’s jump, the JBL stock is up nearly 13% so far this year. 

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