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On Tuesday, Barclays (LON:BARC) reiterated its Overweight rating on Jabil (NYSE:JBL) shares, maintaining a $184.00 price target. In a recent evaluation, Barclays highlighted Jabil’s strategic move into the high-speed transceiver market following its acquisition of Intel’s transceiver manufacturing assets in late 2023. The sale came as Intel, with its $95.43 billion market cap, faced challenges, including negative free cash flow and profitability issues, according to InvestingPro data. This acquisition has allowed Jabil to enter the 400G/800G transceiver space, with Meta (NASDAQ:META) emerging as its largest customer in this segment.
Jabil is currently in qualification talks with major tech firms Meta, AWS, and NVDA for its 800G and 1.6T pluggable transceivers. Barclays estimates Jabil’s total optical revenues to be between $300 million and $400 million, with the potential to reach $1 billion in the coming years. The company’s partnership with MaxLinear, which supplies the PAM4 DSP technology used in its products, is a key part of its strategy. For deeper insights into how this strategic move impacts Jabil’s growth potential, InvestingPro offers comprehensive analysis and financial metrics in its Pro Research Report, available for over 1,400 US stocks.
The firm also pointed out Jabil’s potential to become a new competitor to established players in the field if it succeeds in getting NVDA’s qualification for its 800G and 1.6T modules. Additionally, Jabil’s discussions about its capabilities in assembling Co-Packaged Optics (CPO) by leveraging its optics assets and expanding capacity in Silicon Photonics (SiPho) were noted. This could allow Jabil to offer Photonic Integrated Circuits (PICs) and embedded lasers, positioning itself competitively against traditional Electro-Absorption Modulated Lasers (EMLs) in the market.
Jabil’s stock performance and future prospects are closely watched by investors as the company continues to expand its presence in the optical communications market, which is critical for the infrastructure of hyperscale data centers. The company’s efforts to articulate its laser content based on SiPho and related value propositions could further strengthen its market position.
In other recent news, Intel Corporation (NASDAQ:INTC) has completed the sale of its NAND memory technology and manufacturing business to SK hynix (KS:000660) for approximately $1.9 billion. This transaction marks the final phase of a deal initially announced in October 2020, allowing Intel to concentrate on its core businesses and emerging technologies. In addition, Intel’s Vision 2025 event has drawn attention, with new CEO Lip-Bu Tan outlining strategic priorities, including a focus on engineering and customer satisfaction. Analysts from Bernstein, Stifel, Truist, and KeyBanc have maintained various ratings on Intel stock, reflecting cautious optimism and anticipation for more detailed strategic plans. Bernstein has kept a Market Perform rating with a $25 target, while Stifel and Truist both hold a Hold rating with a $21 target. KeyBanc maintains a Sector Weight rating with a $23 target, noting the company’s efforts in semiconductor manufacturing and AI advancements. Intel’s leadership transition and strategic shifts are being closely monitored by investors, particularly as the company aims to enhance its foundry business and product design approach. These developments come at a time when the semiconductor industry faces challenges from global supply chain disruptions and increasing competition.
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