Jabil Circuit IncJBL
± MixedCapitalrelevance
Stock rally raises valuation questions; strong AI-driven earnings and raised guidance are positive, but high valuation suggests optimism priced in.
Impact on stocks 3
Semiconductors▲ · 1 stocks
Jabil Circuit IncArtificial Intelligence▲ · 1 stocks
Flex LtdFLEX
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Sanmina CorporationSANM
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HPE's $700 Million AI Networking Backlog Tests Supply Chain
Hewlett Packard Enterprise is sitting on a record pile of AI networking orders it cannot yet ship, and the gap between bookings and revenue is now the central question for the stock. Orders for the Networks for AI portfolio reached $700 million in fiscal Q3 2026, a new high, after the company blew past its cumulative fiscal 2026 target of at least $2 billion and raised that target to $2.5 billion to $3 billion. The hardware behind those orders includes routers and switches HPE is supplying to Oracle for one of the largest AI cloud infrastructure build-outs, work that extends more than a decade of engineering between Oracle and Juniper Networks, the business HPE acquired last year. Networking revenue rose 10% in fiscal Q3 2026 against a prior-year base that includes Juniper Networks, while networking orders rose 36%, and the segment brought in $2.9 billion of the $12.2 billion in total revenue HPE reported for the quarter. Management attributes the gap to supply, citing memory and wafer capacity that have gated supply since the start of fiscal 2026, and HPE has more than doubled its networking purchase commitments quarter over quarter while signing multiyear supply agreements to lock capacity. Networking revenue growth is guided to 11% to 13% in fiscal Q4 2026 and 14% to 17% in fiscal 2027, with the next scheduled look at the business coming at the Networking Investor Day on September 30, 2026.
▲impact 4
Meta Raises 2026 Capex Guidance to $130 Billion to $145 Billion
Meta Platforms raised its full-year 2026 capital expenditure guidance to a range of $130 billion to $145 billion, including principal payments on finance leases, narrowed from a prior $125 billion to $145 billion range in its Q2 2026 report on July 29, 2026. The forward guidance nearly doubles Meta's full-year 2025 capex of $72.215 billion, and Q2 capital expenditures alone reached $31.1 billion, driven by servers, data centers, and network infrastructure. To fund the build, Meta ended Q2 with $90.3 billion in cash and marketable securities and $83.7 billion in debt, and announced a strategic venture with BlackRock to develop a one gigawatt data center in El Paso, Texas. CFO Susan Li said Meta is demand constrained today, and CEO Mark Zuckerberg said the company is receiving quite a number of offers at a meaningful premium over what we paid for the compute, framing direct compute sales as one leg of a portfolio that also includes APIs, business agents, productivity tools, and subscriptions. The strain is visible in the quarterly numbers: Q2 free cash flow was $784 million, down 91.31% year over year, and operating margin compressed to 31% from 43%, even as Q2 revenue reached $60.801 billion, up 27.96% year over year and above the $60.286 billion consensus, with advertising revenue of $59.4 billion, up 27%.
▲2impact 4
Amazon AWS Revenue Hits $42.23B, Up 37% in Fastest Growth in 18 Quarters
Amazon Web Services posted $42.23 billion in revenue, growing 37% year over year, the segment's fastest growth in 18 quarters, with a 39.4% operating margin and a $496 billion contracted backlog. Amazon's chips and AI businesses each eclipsed run rates of more than $25 billion in the second quarter, both growing at triple-digit percentages year over year, while 98% of Amazon's top 1,000 EC2 customers use Graviton and Anthropic and OpenAI have made multi-year, multi-gigawatt commitments to Trainium. Q2 operating income landed at $27.46 billion, up 43.2% year over year, and advertising is a $70 billion-plus trailing-twelve-month business growing 26%. Capex reached $54.21 billion in a single quarter, up 68.4% year over year, and free cash flow swung to negative $7.6 billion on a trailing-twelve-month basis, though most AI capacity is contracted for at least five-year terms. Since Amazon reported Q2 on July 30, 2026, AMZN moved from $230.08 to $251.19, while SPY went from $747.03 to $762.70 and QQQ went from $687.99 to $716.92. Andy Jassy said AWS could become a few hundred billion dollar revenue business and now believes it will be at least double that and very possibly a trillion dollar annual revenue business in time.