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Analysts have raised Sanmina's fair value estimate by $10 to $129.50, citing recent momentum from strategic data center partnerships and an increased focus on AI-related opportunities in the sector.

Analyst Commentary

Analysts remain divided on the trajectory and drivers of Sanmina's valuation, reflecting both optimism about recent developments and recognition of persistent risks and uncertainties.

• Bullish analysts highlight the increased price targets, citing new data center partnerships and strong positioning in artificial intelligence, which could support sustainable revenue growth.
• The recent agreement involving Sanmina as AMD's preferred NPI partner in AI datacenter collaborations with OpenAI highlights the company's importance in emerging, high-growth technology segments.
• Sanmina's strategic acquisition of a data center infrastructure manufacturing business is expected to accelerate scaling in the cloud and AI markets and drive further top-line expansion.
• Improvements in end markets, such as communications as inventory corrections ease, are providing incremental support to Sanmina's long-term growth outlook.

• Bearish analysts emphasize that the ultimate impact of AI-related partnerships is difficult to quantify, as outcomes depend on customer integration choices and the number of racks Sanmina eventually manufactures.
• Execution risks remain due to the need for program ramps to materialize and achieve scale in the coming quarters.
• There is caution around the ongoing weak macroeconomic environment, which could challenge Sanmina’s growth targets despite its strategic moves.
• Competition remains a factor, with customers retaining options to select alternative manufacturing partners for new product introduction and production work.

What's in the News

• Sanmina issued new earnings guidance for the fourth fiscal quarter ending September 27, 2025. The company projects revenue in the range of $2.0 billion to $2.1 billion and GAAP diluted earnings per share between $1.21 and $1.31 (Company Guidance).
• The company repurchased 197,018 shares for $13.38 million between March 30 and June 28, 2025, completing its share buyback program for a total of 801,093 shares and $60.8 million (Buyback Update).

Valuation Changes

• The Fair Value Estimate has increased by $10, moving from $119.50 to $129.50. This reflects greater optimism about Sanmina’s future prospects.
• The Discount Rate has edged up modestly from 8.31% to 8.34%, indicating a slightly higher perceived risk or required return on capital.
• The Revenue Growth Projection remains virtually unchanged at 6.38%, suggesting no material adjustment in expected top-line expansion rates.
• The Net Profit Margin is stable, with negligible change, holding at 3.88% for both the prior and current analysis.
• The Future Price-to-Earnings (P/E) Ratio has risen from 20.6x to 22.4x, signaling a greater willingness by the market to pay for anticipated future earnings.