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Sanmina (SANM +12%) is surging after closing out FY25 with strong Q4 (Sep) results and upbeat FY26 guidance. The EMS provider beat EPS and revenue expectations for the second straight quarter, aided by broad-based demand and excitement over its ZT Systems acquisition. Sanmina has now posted back-to-back double-digit EPS beats for the first time in two years.

• Q4 revenue rose 3.9% yr/yr to $2.10 bln, modestly above expectations. IMS revenue climbed 3.3% yr/yr to $1.68 bln, led by communication networks, cloud, and AI infrastructure. CPS revenue grew 7.3% yr/yr to $448 mln, reflecting balanced end-market demand.
• Strongest trends came from cloud, AI, and communication networks, driven by high-performance switches and enterprise storage.
• Industrial, energy, and medical markets remain healthy heading into FY26, while defense and aerospace stay solid.
• Automotive remains soft near term, though growth is still expected in FY26.
• The ZT Systems recently closed acquisition (annual run rate $5-6 bln vs. SANM FY25 revenue $8.1 bln) is transformative, expanding Sanmina's AI and cloud capabilities and enabling full-system integration at scale.

Briefing.com Analyst Insight:

Sanmina's fiscal Q4 and FY25 results reflect a company in transition from a steady EMS player to a higher-value systems integrator in the AI and cloud infrastructure space. The ZT Systems acquisition meaningfully boosts its scale and strategic positioning, giving it a credible foothold in high-performance computing. While integration risk remains—especially given the deal's size relative to Sanmina's base—management's upbeat commentary and expanding pipeline suggest solid visibility into FY26. With earnings momentum, diversified end-market exposure, and AI tailwinds, SANM looks attractively positioned. However, after the recent surge, investors may want to monitor execution on ZT integration and margin sustainability before chasing the rally.