Sanmina, like many other electronics manufacturing services providers building hardware, has capitalized on the artificial-intelligence boom. Its latest quarterly earnings, however, reveal it hasn't been relying exclusively on that surge in revenue.
Sanmina's AI and cloud systems business, which focuses on the design and manufacturing of data-center infrastructure, soared 179% to $2.37 billion in the fiscal fourth quarter from a year ago, management said on an earnings call Monday.
The AI and cloud systems segment made up 37% of Sanmina's total revenue in fiscal 2026 and is projected to hit 45% in fiscal 2027 and 50% in fiscal 2028, according to Susquehanna analyst Mehdi Hosseini.
Shares of Sanmina jumped 15% to $171.49 in premarket trading Tuesday. The stock was heading for its best single-day percentage gain since Oct. 6, 2025, according to Dow Jones Market Data.
Key drivers of Sanmina's revenue surge included manufacturing ramps for platforms like Helios and Cerebras, with shipments heavily weighted toward the second half of fiscal 2027. Sanmina's just issued report was for its fiscal 2026 fourth quarter ended Oct. 3.
Management also noted that growth was fueled by the integration of ZT Systems' data center infrastructure manufacturing business, acquired from Advanced Micro Devices last October.
Beneath the surface, it was the core business that drove the latest earnings beat. Sectors such as industrial and energy, defense and aerospace, and medical have been expanding. A new transformer business will also launch in January. Combined, these divisions grew 19% to $1.49 billion from a year ago in the fiscal fourth quarter, with Hosseini noting that strength in these markets "de-risks longer-term revenue growth."
Under its core business, Sanmina makes and repairs optical, electronic, and mechanical products for original equipment manufacturers.
As uncertainty grows over the sustainability of the AI trade, Sanmina finds itself well-positioned on both sides of the equation.
"We see this broader earnings base reducing dependence on the timing of AI shipments," Hosseini wrote in a note Tuesday.
Still, Hosseini sees risks. While revenue has grown, profit margins are expected to hold flat -- management guided to a range of 7% to 7.5% for fiscal 2027. The analyst noted that supporting these massive new platforms will demand both higher operating expenses and increased capital expenditures. The firm has a Neutral rating and $210 price target.
Sanmina also outlined preliminary guidance for fiscal 2027 that flew fast Wall Street's estimates, boosting investor confidence. The company expects adjusted earnings from $15.50 to $17.50 a share on revenue of $17.5 billion to $19.5 billion. Analysts polled by FactSet anticipate adjusted earnings of $14.07 a share on revenue of $16.61 billion.
Revenue surged 84% to $3.86 billion for the fiscal fourth quarter, well above Wall Street's calls for $3.48 billion. Adjusted earnings of $4.43 a share topped analysts' consensus estimates of $3.27 a share.
Comments