SKN | UBS Upgrades Jabil as AI Infrastructure Growth Strengthens Its Outlook

Key Takeaways:

• UBS upgraded Jabil to Buy, reflecting greater confidence in AI-related demand and the company’s expanding data-center infrastructure exposure.
• UBS expects Jabil’s AI-related revenue to grow at least 50% in fiscal 2027 to approximately $20.3 billion.
• The bank raised its fiscal 2027 and 2028 revenue estimates by about 6% and EPS estimates by 6% and 10%, respectively.
• UBS maintained its $430 price target despite reducing the valuation multiple to account for higher capital costs and broader pressure across AI infrastructure stocks.

UBS has upgraded Jabil to Buy, signaling increased conviction in the company’s exposure to the rapidly expanding AI infrastructure market. The Swiss bank’s revised forecasts point to stronger demand from major hyperscalers, additional capacity expansion and improving operating leverage, while its unchanged $430 price target reflects a more measured valuation framework.

Why UBS Is Becoming More Constructive on Jabil

The central element of UBS’s revised view is Jabil’s expected acceleration in AI-related revenue. The bank forecasts growth of at least 50% in fiscal 2027, bringing AI-related revenue to approximately $20.3 billion.

UBS expects capacity expansion in Memphis and North Carolina to support this trajectory, alongside continued demand from major hyperscalers including Amazon, Meta and Google. The bank also identified the Hanley acquisition and broader data-center infrastructure demand as additional contributors to growth.

For UBS, the significance extends beyond one customer or project. The bank’s analysis suggests that Jabil is increasingly positioned within the physical infrastructure supporting the expansion of artificial intelligence, creating a potentially broader earnings opportunity than the market currently recognizes.

UBS Raises Forecasts While Keeping Its Target Intact

Following supply-chain checks indicating stronger demand, UBS raised its fiscal 2027 and 2028 revenue estimates by approximately 6%. Its EPS forecasts were increased by 6% and 10%, respectively.

UBS expects Amazon and Meta to each contribute roughly $1 billion in incremental revenue, while a third hyperscaler, which the bank believes is Google, could provide another growth catalyst later in fiscal 2027.

The bank also expects Jabil’s operating margin to improve to approximately 6% in fiscal 2027 from an estimated 5.8% in fiscal 2026. Investments in automation and robotics are expected to support that improvement, while healthcare-related demand could add another source of diversification as Jabil’s Croatia facility comes online.

Why UBS Did Not Raise the $430 Target

The most notable part of UBS’s call is that the bank upgraded the stock without increasing its price target. UBS reduced its valuation multiple to approximately 22 times from 25 times, citing higher capital costs and a broader de-rating across AI infrastructure stocks.

That decision suggests UBS is separating fundamental earnings momentum from valuation risk. The bank estimates that Jabil shares currently imply roughly 9.5% annual EPS growth over 10 years, compared with UBS’s forecast of approximately 11%.

For sophisticated investors, the message is therefore more nuanced than a simple upgrade. UBS sees improving fundamentals and stronger AI exposure, but it is not assuming that expanding AI demand should automatically command a higher valuation multiple.

For HNWI investors monitoring global technology infrastructure and the banking sector’s assessment of AI-linked growth, UBS’s revised Jabil view highlights a broader discipline: earnings expectations can improve even while valuation assumptions become more conservative. That distinction will remain important as banks reassess the sustainability of AI infrastructure spending.

For a confidential discussion regarding cross-border banking structures, global technology exposure and institutional market positioning, contact our senior advisory team.