Rapidly Expanding Artificial Intelligence (AI) Shares Worth Investing In Before They Run Out

Rapidly Expanding Artificial Intelligence (AI) Shares Worth Investing In Before They Run Out

In a significant development, contract electronics manufacturer Jabil has raised its full-year revenue forecast to $29 billion, up from the prior estimate of $27.9 billion. This upward revision is attributed to the rapid growth in AI data center hardware, a sector that now accounts for nearly 30% of Jabil's total revenue.

Based in the United States, Jabil serves various industries, including automotive, semiconductor equipment, networking, and data centers. The company's strategic acquisitions and investments have bolstered its technological capabilities, particularly in critical areas like silicon photonics and thermal management. Notable acquisitions include Mikros Technologies, a liquid cooling specialist, and Intel's photonics assets.

The demand for complex server and rack integration, advanced networking, power management, and liquid cooling solutions needed for AI data centers has been driving Jabil's growth. This surge has resulted in a 35% year-over-year increase in earnings for the company, with fiscal 2025 earnings per share now expected at $9.33, up from an earlier estimate of $8.95.

To capitalise on this growth, Jabil is investing $500 million into a new AI hardware manufacturing facility in North Carolina, scheduled to open by mid-2026. This plant will focus on manufacturing high-margin AI infrastructure components such as liquid cooling systems and server racks, aligning with U.S. government priorities on domestic production and national security.

The AI server market is projected to grow at an annual rate of 34% through 2030, and Jabil’s well-established global supply chain and technological positioning make it strongly positioned for sustained growth in AI data center hardware. The company's low price-to-earnings ratio (around 12.8) combined with robust AI-driven growth make it a compelling structural play in AI infrastructure for investors focused on growth at a reasonable price.

Jabil's revenue and earnings are expected to continue their upward trajectory, with estimates for the current and upcoming fiscal years receiving a boost. The company's stock has already gained 45% so far in 2025, outperforming the 1% increase in the Nasdaq Composite index this year. If Jabil trades at 25 times earnings after a couple of years and achieves the $12.57 per share earnings that consensus estimates are projecting, its stock price could hit $314, a 50% jump from its current stock price.

In summary, Jabil's strategic investments, technological edge, and supply chain scale uniquely position it to benefit from the secular expansion of the AI data center infrastructure market. Its strong financial position, low price-to-earnings ratio, and robust growth prospects make it an attractive investment opportunity for those focused on growth at a reasonable price.

1. Jabil's strategic investments in technology, particularly artificial-intelligence (AI) data center hardware, have bolstered its financial position, contributing to a projected 35% year-over-year increase in earnings and an expected P/E ratio of around 25 times earnings in the future, making it an attractive opportunity for investors seeking growth at a reasonable price.
2. With the AI server market projected to grow at an annual rate of 34% through 2030, Jabil's strong position in global supply chain, technological edge, and commitment to investing in AI infrastructure components such as liquid cooling systems and server racks, positions the company for sustained growth in this sector, which could potentially drive its stock price up by 50%, according to consensus estimates.

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