How the Builder Behind Your Favorite AI Racks Holds the Key to Gains

In partnership with

Everyone’s arguing about who has the fastest chip.

Meanwhile, somebody has to bolt the boards into the racks, wire the optics, and ship the whole contraption without losing a screw. That somebody is this company.

Final Days to Invest: Every City’s a Potential Surf Destination

Topgolf revolutionized golf by turning it into a social, tech-driven game for anyone. And they’ve made billions in annual revenue doing it. Surf Lakes is applying that same model to surfing, and investors can still join them until 10/30 at 11:59 PM PT.

Their patented tech creates 2,000 ocean-quality rides per hour, anywhere in the world, across all skill levels.

It’s a $65B surf tourism market opportunity. They’ve already sold 8 tech licenses, plus their own commercial parks are underway.

3x world champ Tom Curren and surf icon Mark Occhilupo have joined as ambassadors and shareholders. Even actor Chris Hemsworth has praised Surf Lakes.

You have until October 30th at 11:59 PM PT to invest in Surf Lakes.

Invest In Surf Lakes

_{This is a paid advertisement for Surf Lakes’ Regulation CF offering. Please read the offering circular at https://invest.surflakes.com}

What Actually Matters

• AI and cloud orders: Are new rack projects landing and shipping each quarter? If bookings grow while lead times shorten, the story stays strong.

• Optics ramp: 800G module shipments and new customer wins tell you whether AI networking” is hype or hardware.

• Mix and margins: More complex builds and services should lift margins even if some volumes wobble.

• Capacity adds: New U.S. buildouts for AI hardware need to hit the timeline. Think more bays, more trays.

• Customer concentration: Still diversified, but investors should peek at whether one giant buyer is getting too giant.

Valuation, Without The Headache

At roughly 36 times trailing earnings, JBL isn’t a garage sale.

The thesis is simple: if AI racks and optics grow into a bigger piece of the pie, earnings can rise faster than revenue. When profits outpace sales, the multiple has less heavy lifting to do. 

If hyperscalers pause spending or modules slip, the market usually takes a red pencil to the multiple first and asks questions later.

Story Time: The Build It, Don’t Boast It Company

If you’ve ever watched a teardown video where someone says, “Surprise, this premium gadget was assembled by X,” that’s the Jabil economy.

They aren’t trying to be the face of a product. They’re trying to be the hands. AI has been a gift for that model.

Racks and optics are complicated, time-sensitive, and unforgiving. There’s not a lot of TikTok clout in perfectly torqued fasteners, but there’s a lot of repeat business.

Jabil’s edge is execution. Get the design-for-manufacture right, stage the parts, line-balance the assembly, QA the living daylights out of it, and ship on time. Then do it again, but faster. 

When the industry steps from 400G to 800G optics, or from standard servers to dense AI trays, Jabil’s play is to scale with it.

The customer wins a faster time-to-rack; Jabil wins a richer bill of materials and a tighter relationship.

What Could Go Right

• AI capacity unlock. As new lines come online, AI revenue steps up, not just in units but in mix (more value per unit).

• Optics momentum. Smooth 800G ramp feeds steady topline and better margins, while 1.6T talk begins to sparkle in roadmaps.

• Second engines fire. Healthcare devices and warehouse robotics add steady, less cyclical growth to the AI fireworks.

• Cash compounding. Stronger free cash flow funds more capacity and selective buybacks without starving R&D.

What Could Go Wrong

• Spending pause. Hyperscalers slow orders to digest what they already bought. That’s not a “no,” it’s a “not now,” but the market rarely distinguishes.

• Price knife fights. Rival manufacturers undercut to win big programs, pressuring margins.

• Policy plot twist. New tariffs or export rules force rerouting, delaying deliveries and nudging costs higher.

How I’d Think About Position Size

Starter (1–2%). Build a small position on routine red days or broader market dips. You’re paying for proven execution with AI upside.
Earn the add (toward 3–4%). Scale only if two back-to-back quarters show:

• AI and optics shipments rising,

• margins stable or improving, and

• free cash flow comfortably positive after capex.

Brake lights: Trim or tighten risk if AI bookings soften while margins slip at the same time, or if tariff shocks hit multiple segments.

The Retail Reader’s Cheat Sheet

• Jabil is the builder. Less sizzle, more socket wrench.

• AI is real revenue. Racks and optics aren’t a press release; they’re shipments.

• Diversification matters. Healthcare and automation can smooth the cycle.

• Watch the mix. Higher-value builds can lift profits even if units plateau.

• Valuation needs execution. The price assumes the ramps keep ramping.

The Bottom Line

Jabil is the quiet adult in the AI room. Less we changed the world, more we shipped it on Tuesday.

If the company keeps turning complex AI hardware into smooth, repeatable builds, and optics keeps ramping, earnings can pull the stock along. 

Start small, let the next couple of quarters confirm the run-rate, and only size up if execution stays crisp.

In a market full of big promises, Jabil’s best punchline is still a tracking number.

That's our coverage for today; thanks for reading! Reply to this email with feedback or any tech stocks you want me to check out.

Best Regards,
—Noah Zelvis
Tech Stock Insider