Key Takeaways
- Dell’s stock surged 235% in 2026, driven by a 181% jump in its infrastructure solutions group (ISG) due to booming demand for AI‑optimized servers.
- Dell’s FY27 Q1 revenue rose 88% YoY to $43.8 billion, yet the stock still trades at a low 2× sales, offering multibagger upside if the market re‑rates the company.
- Jabil, a contract electronics manufacturer, is positioned to capture AI‑related growth across data‑center infrastructure, semiconductor test equipment, and optical networking.
- Jabil expects $13.6 billion of AI‑related revenue in FY26 (up 51% YoY), which will represent roughly 39% of its total sales.
- The company’s FY26 Q3 results showed 12% YoY revenue growth to $8.8 billion and a 24% jump in non‑GAAP EPS to $3.16, prompting an raised full‑year guidance of $35 billion revenue and $12.70 EPS.
- With a price‑to‑sales ratio of just 1.2—far below the Nasdaq Composite’s 5.3×—analysts see room for Jabil to trade at a premium, potentially lifting its market cap to $143 billion by FY28 if it reaches a 3× sales multiple.
Dell’s Explosive AI‑Driven Rally
“Dell Technologies (DELL +1.41%) stock has shot up by a phenomenal 235% in 2026, as investors have been buying the stock hand over fist to capitalize on the booming demand for artificial intelligence (AI) servers.” The surge reflects how quickly the market has rewarded companies that can supply the hardware backbone for AI workloads. Dell’s infrastructure solutions group (ISG) – the division that builds AI‑optimized servers – posted a staggering 181% year‑over‑year increase, becoming the primary engine behind the firm’s overall revenue acceleration.
Dell’s FY27 Q1 Results Show Momentum
In its fiscal 2027 first‑quarter report (ended May 1), Dell announced that “revenue shot up 88% year over year to $43.8 billion, primarily driven by a 181% spike in its infrastructure solutions group (ISG) segment.” The ISG’s performance underscores the strength of demand for AI‑ready servers, storage, and networking gear. Management highlighted that the momentum is likely to persist, positioning Dell for sustained long‑term growth as AI adoption expands across enterprises and hyperscalers.
Valuation Still Attractive Despite the Rally
Even after the meteoric price rise, Dell trades at “just 2 times sales,” a multiple that suggests considerable upside if the market begins to assign a premium valuation comparable to other high‑growth tech names. Analysts argue that should Dell’s sales continue to expand at double‑digit rates, the stock could become a multibagger, rewarding early investors who bought into the AI‑server thesis before the broader market fully priced in the opportunity.
Jabil: An Underrated AI Play
While Dell has captured headlines, another company—Jabil (JBL 0.32%)—is quietly benefiting from the same AI‑infrastructure boom yet remains relatively overlooked. Jabil is a contract electronics manufacturer serving automotive, semiconductor equipment, healthcare, networking, cloud and data‑center infrastructure, and other sectors. Its semiconductor capital equipment, cloud and data‑center, and networking businesses are “in solid form due to AI,” positioning the firm to reap rewards from multiple AI‑driven end markets.
Jabil’s Business Lines Align with AI Trends
Jabil manufactures critical data‑center components such as server racks, power‑management solutions, and liquid‑cooling systems. It also supplies advanced semiconductor test and wafer‑fabrication equipment, plus wired and optical networking gear. As the article notes, “Jabil manufactures data center infrastructure, such as server racks, power management solutions, and liquid‑cooling systems. It also offers advanced semiconductor test equipment and wafer fabrication equipment.” These products are essential for building and scaling the AI servers and accelerators that hyperscalers and enterprises are deploying at record pace.
AI Revenue Expectations Are Rising Rapidly
The company’s AI‑related revenue outlook has been revised upward several times over the past year. Jabil “anticipates $13.6 billion in AI-related revenue in fiscal 2026, up by 51% from the previous year.” Initially, management had forecast only a 25% increase to $11.2 billion, but stronger demand for its AI data‑center, networking, and semiconductor offerings pushed the estimate higher. Consequently, AI is projected to account for roughly 39% of Jabil’s total top line in FY26, up from 30% in FY25—a clear sign that the AI segment is becoming a dominant growth driver.
Strong Q3 FY26 Performance and Raised Guidance
Jabil’s fiscal 2026 third‑quarter results (ended May 31) reinforced the AI narrative: “Its revenue increased by 12% year over year to $8.8 billion, while non-GAAP earnings per share increased by 24% to $3.16.” The beat prompted the firm to raise its full‑year forecast, now calling for “fiscal 2026 revenue of $35 billion, which would be an improvement of 17.4% from the prior year.” Non‑GAAP EPS guidance was lifted to $12.70, representing a 30% increase over FY25 levels, compared with only a 15% rise in the previous fiscal year. These figures illustrate how the AI tailwind is translating into tangible earnings expansion.
Customer Wins Signal Future Momentum
Beyond the numbers, Jabil is securing new business that should sustain its growth trajectory. The article highlights that the firm “has been winning new customers for its AI-related solutions, adding a third hyperscaler customer to its ranks in the previous quarter.” Moreover, Jabil “won additional business after signing initial deals with its hyperscaler customers,” suggesting that early engagements are evolving into larger, multi‑year contracts. With the global AI server market forecast to grow at a 34% compound annual rate through 2030 and semiconductor manufacturing equipment expected to advance at 11% annually through 2034, Jabil’s addressable market is set to expand dramatically.
Optical Networking as a Emerging Catalyst
Another area poised to boost Jabil’s prospects is optical networking, which the piece describes as “emerging as the next major bottleneck in the AI infrastructure market.” As AI models grow larger, the need for high‑bandwidth, low‑latency interconnects between servers and storage becomes critical. Jabil’s expertise in optical networking equipment positions it to capture spending that could otherwise be constrained by copper‑based solutions, providing an additional avenue for revenue diversification and upside.
Analyst Optimism and Valuation Upside
Analysts have turned increasingly bullish on Jabil following its latest quarterly report, significantly raising revenue expectations. The company’s current price‑to‑sales ratio stands at “1.2,” which is “well below the tech-focused Nasdaq Composite index’s sales multiple of 5.3.” Assuming Jabil can achieve a conservative 3× sales multiple by FY28—based on the revenue trajectory shown in the accompanying YCharts model—its market capitalization could swell to roughly $143 billion, about 3.5× its present valuation. This potential re‑rating presents a compelling entry point for investors seeking exposure to AI‑linked growth at a discounted multiple.
Investment Takeaway
Both Dell and Jabil illustrate how the AI infrastructure boom is creating outsized opportunities for companies that supply the essential hardware and components. Dell’s rapid stock appreciation validates the market’s enthusiasm for AI servers, yet its low sales multiple still leaves room for further upside. Jabil, while less celebrated, offers a diversified play across data‑center hardware, semiconductor test equipment, and emerging optical networking, backed by rising AI revenue guidance, strong quarterly performance, and a valuation that lags far behind its peers. For investors looking to capitalize on the AI trend, Jabil represents an under‑appreciated candidate with multibagger potential should the market eventually recognize its growth prospects and award it a higher sales multiple.
https://www.fool.com/investing/2026/06/24/missed-out-on-dell-technologies-red-hot-rally-here/