Sanmina's AI Bet Pays Off: Revenue Up 79% to $14.53B, ZT Systems Drives FY27 Push

Sanmina Corporation grew fiscal 2026 revenue 79% to $14.53 billion, and the electronics manufacturer says the AI infrastructure buildout is only getting started. Management guides FY27 revenue of $17.5–$19.5 billion, with adjusted EPS of $15.50–$17.50, according to a bullish analysis published on Seeking Alpha.

The catalyst is clear. Sanmina closed its acquisition of ZT Systems — the server and rack-scale hardware business previously owned by AMD — and that deal reshaped the company's top line almost overnight. FY26's 79% surge to $14.53 billion reflects the integration of ZT's AI platform manufacturing into Sanmina's broader EMS portfolio.

Who is Sanmina in the AI supply chain?

Sanmina (NASDAQ: SANM) manufactures complex electronics, components, and full integrated systems for customers across AI infrastructure, communications, industrial, medical, and defense markets. It sits in the middle of the stack — not designing GPUs, but assembling the racks, boards, and full systems that hyperscalers and OEMs deploy into AI data centers.

That position has historically carried thin margins. The analysis, authored by a Seeking Alpha contributor ranked in the top 1.5% of investment experts on TipRanks as of August 2026, notes that Sanmina's adjusted operating margin is forecast to normalize to 7–7.5% even as revenue climbs toward $19.5 billion. Growth is delivering. Profitability per dollar of sales is compressing slightly.

What do the FY27 numbers show?

The guidance package tells a story of scale over spread:

• Revenue: $17.5–$19.5 billion for FY27, up from $14.53 billion in FY26
• Adjusted EPS: $15.50–$17.50 per share
• Adjusted operating margin: normalizing to 7–7.5%
• Valuation: roughly 9.5x FY27 adjusted EPS guidance at current prices

The analyst, who holds a long position in SANM and AMD through stock ownership, options, or other derivatives, maintains a Buy rating first issued last year on valuation grounds — the stock looked cheap then, and the author argues it still does.

Where's the upside?

The bull case math is straightforward. If Sanmina reverts to its historical earnings multiple, the analysis sees roughly 34% upside to $209 per share. That re-rating depends almost entirely on execution in two verticals: AI and cloud.

AI-related sales and new platforms are expected to drive further upside in FY27 beyond the base guidance, the analysis states. ZT Systems gives Sanmina direct exposure to the rack-scale AI compute market, where hyperscaler capex continues to run at record levels. Each new AI platform win compounds the revenue base acquired in the deal.

The risks sit alongside the rewards. A 7–7.5% operating margin leaves little cushion if AI infrastructure spending slows or if hyperscalers shift workloads to in-house system integration. EMS contracts are large but contestable, and margin normalization suggests Sanmina is trading profitability for volume as it scales.

Why the valuation gap?

At ~9.5x FY27 adjusted EPS guidance, Sanmina trades well below where AI-exposed hardware names typically change hands. The market, in effect, is pricing the company as a traditional contract manufacturer rather than an AI infrastructure beneficiary. The analyst's $209 target assumes that discount closes as AI revenue becomes a larger, more durable share of the mix.

For a company that grew the top line 79% in a single fiscal year, that skepticism cuts both ways. It caps the stock today. It also frames the bet: sustained AI and cloud execution through FY27, at the upper end of that $17.5–$19.5 billion range, is what converts a cheap EMS stock into a re-rated AI infrastructure play.