Executive Answer
ZT turned Sanmina into a much more direct AI infrastructure manufacturer. Communications Networks and Cloud and AI Infrastructure revenue was $2.77 billion in Q2 FY2026, up 278% year over year. S1
The acquisition closed on October 27, 2025 and Q2 FY2026 was the first quarter where demand, accelerated compute shipments, and FY2026 guidance forced the market to reset expectations. S2 S6
More conviction needs segment contribution margins, customer concentration by hyperscaler, backlog, and evidence that Q2 was not mostly a pull-forward. Without that, the current price leaves a narrow margin of safety.
Fundamentals Snapshot
Growth-Investment Scorecard
Scores are research-priority labels, not a rating. They emphasize durability and valuation as much as near-term growth.
Market Fit
Fit is strong but crowded. Sanmina now maps directly to cloud and AI rack deployments, liquid-cooling-capable manufacturing, and hyperscaler infrastructure cycles. That is exactly where the market has been paying up.
Timing is less clean. The stock traded near $260 on June 15, 2026, compared with roughly $88 one year earlier and $150 at year-end 2025. The share-price move leaves the thesis dependent on FY2027 growth visibility, not just FY2026 execution. S7
Consensus posture is mixed. Public forecast pages show hold-style rating context and price targets below or near the current price, while estimate pages have moved after the Q2 beat. The free public estimate set is not clean enough for a decision-ready model. S8
What The Company Does
IMS includes printed circuit board assembly and test, high-level assembly and test, and direct order fulfillment. After ZT, this segment includes AI and general-purpose computer infrastructure for hyperscale customers. IMS was about 89% of Q2 FY2026 revenue. S1
CPS includes advanced boards, backplanes, cables, enclosures, precision metal and plastic parts, optical and radio-frequency design, Viking storage platforms, SCI defense and aerospace, 42Q software, repair, logistics and related services. S4
Plain English: Sanmina builds complex hardware for original equipment manufacturers. The business is valuable when products are complex, regulated, time-sensitive, or operationally hard to scale. It is less valuable when customers treat manufacturing as a commodity and force price concessions.
Long-Term Growth Products
The ZT acquisition adds manufacturing capacity for AI and general-purpose compute infrastructure used by hyperscale cloud customers. This is the main long-term growth product line to underwrite. S1 S6
Sanmina became a preferred U.S.-based manufacturing partner for AMD cloud rack and cluster-scale AI solutions. That role can help if AMD customers need faster qualification and deployment cycles. S6
Industrial, energy, medical, defense, aerospace, automotive, advanced boards, backplanes, cables, enclosures, Viking storage platforms, SCI defense products and 42Q software remain important, but they are no longer the main share-price driver.
Decision Hinge: Is ZT A Durable Platform Or A One-Year Step-Up?
ZT adds scale, U.S. manufacturing capacity, liquid-cooling know-how, hyperscaler relationships, and an AMD preferred new product introduction role. If that converts into multi-year rack and cluster deployments, Sanmina can look less like a normal EMS company. S6
Q2 revenue was helped by accelerated compute shipments that shifted into the quarter. The key issue is whether the run-rate normalizes near $3.3 billion to $3.6 billion per quarter or continues toward a credible $16 billion-plus FY2027 path.
Two customers represented 10% or more of Q2 FY2026 net sales and the top ten represented 72%. If AI rack orders are lumpy or a large customer pulls back, the earnings base can reset quickly. S1
Good Growth Investment?
- Yes if: ZT revenue proves durable, FY2027 revenue has line of sight above $16 billion, non-GAAP operating margin holds near mid-6% or better, and free cash flow funds both de-levering and buybacks.
- Watchlist if: revenue remains strong but customer concentration, working capital, and contribution margins are not yet visible. This is the current posture.
- No if: Q2 was mostly shipment pull-forward, AI rack gross margins disappoint, customer forecasts soften, or Sanmina keeps buying back stock before proving post-ZT balance-sheet resilience.
Eight-Quarter Revenue And Earnings Chart
The chart uses the past six reported quarters, Q3 FY2026 company guidance midpoint, and a Q4 FY2026 public-estimate / full-year-guide bridge. Earnings are non-GAAP diluted earnings per share because Sanmina guides and reconciles that metric.
Quarterly growth sequence
Hover or focus a bar for source status and year-over-year growth.
| Quarter | Status | Revenue | Revenue Growth | Non-GAAP EPS | EPS Growth | Source |
|---|---|---|---|---|---|---|
| Q1 FY25 | Reported | $2.01B | +7.0% | $1.44 | +10.8% | SEC 8-K exhibit |
| Q2 FY25 | Reported | $1.98B | +7.7% | $1.41 | +8.5% | SEC 8-K exhibit |
| Q3 FY25 | Reported | $2.04B | +10.9% | $1.53 | +22.4% | SEC 8-K exhibit |
| Q4 FY25 | Reported | $2.10B | +4.5% | $1.67 | +16.8% | SEC 8-K exhibit |
| Q1 FY26 | Reported | $3.19B | +59.0% | $2.38 | +65.3% | SEC 8-K exhibit |
| Q2 FY26 | Reported | $4.01B | +102.3% | $3.16 | +124.1% | SEC 8-K exhibit and 10-Q |
| Q3 FY26 | Company guide midpoint | $3.35B | +64.1% | $2.70 | +76.5% | Q2 FY26 guide midpoint |
| Q4 FY26 | Public estimate / FY guide bridge | $3.53B | +68.4% | $2.81 | +68.3% | Revenue from public estimate snapshot; EPS bridges FY2026 guide |
Growth Estimates Consensus
Free public forward estimates conflict after the ZT reset. The FY2026 line uses company guidance midpoint. FY2027 and FY2028 are a public-estimate/model bridge, not paid consensus. This prevents the report from pretending there is a clean consensus data set where one was not available.
Three-year growth estimate bridge
Use this as a starting point for a model, not as a decision-ready forecast.
| Year | Status | Revenue | Revenue Growth | Non-GAAP EPS | EPS Growth | Source |
|---|---|---|---|---|---|---|
| FY25 actual | Reported | $8.13B | +7.4% | $6.04 | +14.4% | Company non-GAAP release |
| FY26E | Company midpoint | $14.00B | +72.2% | $11.05 | +83.0% | Company FY2026 guide midpoint |
| FY27E | Public estimate / management bridge | $16.00B | +14.3% | $11.40 | +3.2% | Management public target plus public next-year EPS estimate |
| FY28E | Model bridge | $17.70B | +10.6% | $12.54 | +10.0% | Derived from public long-range growth/EPS snapshots |
Competitive Comparison
Sanmina is best compared with EMS and cloud-infrastructure manufacturing peers. Celestica is the strongest AI manufacturing read-through, while Flex, Jabil and Benchmark help frame valuation, margins, diversification and cyclicality.
| Company | Product Position | Past Growth / Margin | Expected Growth | Valuation | Read-through |
|---|---|---|---|---|---|
| Sanmina | EMS, components, AI rack and cluster-scale manufacturing after ZT | Q2 FY26 revenue +102%; non-GAAP operating margin 6.4% | FY26 guide: $13.7B-$14.3B revenue and $10.75-$11.35 non-GAAP EPS | ~23.5x FY26E non-GAAP EPS; ~1.0x FY26E EV/sales | Cleaner AI manufacturing exposure after ZT, but still low-margin and customer concentrated. |
| Jabil | Large EMS platform with cloud, data-center, optical, industrial and healthcare exposure | Recent reported quarter revenue +23%; cloud/data-center momentum | FY26 company outlook raised to roughly $34B revenue and $12.25 adjusted EPS | About 28x forward earnings; about 1.3x EV/sales | Bigger and more diversified, with a broader investor base and higher multiple. |
| Flex | Global design, manufacturing, power and industrial platform | Recent quarter revenue +17%; management points to low to mid-single-digit FY27 growth | Less direct pure AI rack torque than SANM or CLS | About 33x forward earnings; about 2.0x EV/sales | Broader platform, but less clean as a ZT-style AI infrastructure comp. |
| Celestica | Connectivity and Cloud Solutions plus Advanced Technology Solutions | Q1 2026 revenue +53%; adjusted operating margin 8.0% | FY2026 company forecast around $19B revenue and $10.15 adjusted EPS | About 3.3x EV/revenue; forward earnings multiple in the low-to-high 30s | Best public read-through for AI cloud manufacturing, but already receives a premium multiple. |
| Benchmark Electronics | Smaller EMS peer in semi-cap, industrial, aerospace, medical and advanced computing | Q1 2026 revenue +7.2%; FY2026 revenue growth outlook raised to 9%-10% | Steadier industrial and medical growth rather than hyperscaler-scale rack exposure | About 1.2x price/sales; forward PE less available in free public sources | Useful margin/cycle comp, but much smaller and less directly tied to AI rack programs. |
Valuation And Scenario Framing
If FY2026 is a pull-forward year and earnings settle near $9.50, an 18x multiple implies roughly $170 per share. That would still not require a broken business, only lower confidence in durability.
At $260, the market is effectively underwriting something like $13.00 of normalized FY2027 earnings at a 20x multiple, or a similar EV/sales outcome if revenue moves toward $16 billion and margins hold.
A credible path to $18 billion of revenue, high-6% non-GAAP operating margin, and $15-plus earnings per share could justify further upside. That requires multiple quarters of ZT execution and customer breadth.
This is not a target price. It is a decision frame: the stock is attractive only if the next model can support FY2027/FY2028 durability and cash conversion after acquisition debt.
Risks And Disconfirmers
Top-ten customers were 72% of Q2 FY2026 revenue, and two customers crossed 10%. That is the highest-priority diligence issue because it can turn growth into volatility. S1
Even after the AI step-up, Q2 GAAP operating margin was 3.9% and non-GAAP operating margin was 6.4%. The business must generate large revenue volume to create earnings leverage. S2
ZT created acquisition, integration, intangibles, inventory step-up, debt, and contingent consideration items. GAAP and non-GAAP earnings will tell different stories for several quarters. S1
Sanmina is exposed to inventory, customer forecast changes, tariff recovery timing, supply-chain constraints and international manufacturing complexity. Q2 cash flow was strong, but it is not enough evidence by itself.
Monitoring Items
- Q3 FY2026 revenue versus the $3.2 billion to $3.5 billion guide, especially whether any ZT pull-forward reverses.
- Non-GAAP operating margin versus the 6.4% to 6.9% Q3 guide and gross margin within the AI infrastructure programs.
- Free cash flow after working-capital normalization, not just after large receivable or inventory releases.
- Customer concentration: number of 10%-plus customers, top-ten percentage, and any commentary on hyperscaler breadth.
- Net debt, interest expense, and repurchase pace relative to acquisition integration needs.
Evidence Confidence, Assumptions, And Open Work
Medium-high for historical financials, balance sheet, guidance, and the ZT transaction because the primary sources are SEC filings and SEC-filed releases.
Market value uses Q2 FY2026 outstanding shares and the June 15 quote. Future EPS uses non-GAAP earnings because management guides that metric. FY2027/FY2028 revenue estimates are not clean paid consensus.
Pull the Q2 transcript, build a customer concentration bridge, separate ZT contribution margins, collect backlog/order commentary, and build a debt paydown and buyback model.
Source Register
| ID | Source | Type | Date | Coverage | Confidence | Use |
|---|---|---|---|---|---|---|
| S1 | Sanmina Q2 FY2026 Form 10-Q | SEC filing | Apr. 27, 2026 | Quarter ended Mar. 28, 2026 | High | GAAP revenue, end-market mix, cash, debt, share count, ZT accounting, customer concentration. |
| S2 | Sanmina Q2 FY2026 earnings release, Exhibit 99.1 | SEC-filed company release | Apr. 27, 2026 | Q2 FY2026 results and FY2026 guide | High | Non-GAAP results, Q3 and FY2026 guidance, free cash flow, buyback authorization, ZT commentary. |
| S3 | Sanmina Q1 FY2026 earnings release, Exhibit 99.1 | SEC-filed company release | Jan. 26, 2026 | Q1 FY2026 results | High | Non-GAAP chart history, Q2 FY2026 guide, early ZT integration commentary. |
| S4 | Sanmina FY2025 Form 10-K | SEC filing | Nov. 13, 2025 | Fiscal year ended Sep. 27, 2025 | High | Business model, segments, 2025 revenue, gross margin, customer concentration, ZT transaction context. |
| S5 | Sanmina FY2025 earnings release exhibits | SEC-filed company releases | Jan. 2025 to Nov. 2025 | FY2025 quarterly history | High | Six-quarter non-GAAP earnings and cash-flow history. |
| S6 | ZT Systems acquisition closing releases | Company releases | Oct. 27, 2025 | ZT closing and strategic partnership | Medium-high | Strategic rationale, AMD partnership, manufacturing footprint, cloud and AI positioning. |
| S7 | Yahoo Finance chart and quote snapshots | Market data | Accessed Jun. 15, 2026, 2:12 PM EDT | Current price and trading data | Medium | Share price, 52-week range, volume and market timestamp. Market cap cross-checked against public quote pages. |
| S8 | Public estimate snapshots | Market data and estimates | Accessed Jun. 15, 2026 | Forecasts and ratings | Medium-low | Quarterly revenue estimates, public EPS estimate context, analyst rating and price-target context. |
| S9 | Peer public valuation and earnings sources | Market data and company releases | Accessed Jun. 15, 2026 | Peer comparison | Medium | Jabil, Flex, Celestica and Benchmark growth and valuation context. |