Sanmina Reports Strong Q1 Earnings but Weak Guidance Causes Stock Drop
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jan 30 2026
0mins
Should l Buy SANM?
Source: NASDAQ.COM
Sanmina Corp's stock rose by 8.38% as it crossed above the 5-day SMA, reflecting initial investor enthusiasm.
Despite reporting Q1 FY2026 earnings of $3.19 billion, exceeding expectations, the stock plummeted due to weak guidance for Q2, projecting sales between $3.1 billion and $3.4 billion, which fell short of analyst expectations of $3.51 billion. This disconnect between strong earnings and cautious future outlook led to a significant market reaction.
The implications of this earnings report highlight the challenges Sanmina faces in meeting market expectations, despite its strong performance in the AI sector. Investors will need to closely monitor the company's ability to navigate these challenges and deliver on its growth projections.
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Analyst Views on SANM
Wall Street analysts forecast SANM stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for SANM is 180.00 USD with a low forecast of 180.00 USD and a high forecast of 180.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
1 Analyst Rating
0 Buy
1 Hold
0 Sell
Hold
Current: 142.340
Low
180.00
Averages
180.00
High
180.00
Current: 142.340
Low
180.00
Averages
180.00
High
180.00
About SANM
Sanmina Corporation is a global provider of integrated manufacturing solutions, components, products and repair, logistics and after-market services. It provides end-to-end manufacturing solutions, delivering support to original equipment manufacturers in the industrial, medical, defense and aerospace, automotive, communications networks and cloud infrastructure markets. Its operations are managed in two businesses: Integrated Manufacturing Solutions (IMS) and Components, Products and Services (CPS). IMS segment consists of printed circuit board assembly and test, high-level assembly and test and direct-order-fulfillment. CPS includes advanced printed circuit boards, backplanes and backplane assemblies, cable assemblies, fabricated metal parts, precision machined parts and plastic injected molded parts. Its products include optical, radio frequency and microelectronic design and manufacturing services, multi-chip package memory solutions, high-performance storage platforms and others.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Strong Earnings: Sanmina reported nearly $3.19 billion in net sales for Q1 FY2026, a significant increase from just over $2 billion last year, highlighting the company's robust growth potential in the AI market.
- Profit Growth: The company’s non-GAAP net income exceeded $132 million ($2.38 per share), surpassing analyst expectations of $2.14 per share, indicating improved profitability.
- Negative Market Reaction: Despite beating estimates, investors reacted negatively to the company's weak guidance, resulting in a nearly 22% drop in stock price, reflecting a disconnect between high market expectations and actual performance.
- Cautious Outlook: Sanmina projects Q2 net sales between $3.1 billion and $3.4 billion; although the adjusted EPS forecast exceeds the average analyst estimate, the market's expectation for higher sales figures indicates investor concerns about future performance.
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- Strong Earnings: Sanmina reported nearly $3.19 billion in net sales for Q1 FY2026, a significant increase from just over $2 billion last year, highlighting the company's robust growth potential in the AI market.
- Profit Growth: The company’s non-GAAP net income exceeded $132 million ($2.38 per share), surpassing analyst expectations of $2.14 per share, indicating improved profitability.
- Negative Market Reaction: Despite beating estimates, investors reacted negatively to the company's weak guidance, resulting in a nearly 22% drop in stock price, reflecting a disconnect between high market expectations and actual performance.
- Cautious Outlook: Sanmina projects Q2 net sales between $3.1 billion and $3.4 billion; although the adjusted EPS forecast exceeds the average analyst estimate, the market's expectation for higher sales figures indicates investor concerns about future performance.
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- Nasdaq Performance Strong: The Nasdaq 100 index increased by 0.88%, reaching a 2.75-month high, indicating investor optimism in AI infrastructure and semiconductor sectors, which propelled the broader market higher.
- Consumer Confidence Index Declines: Despite the stock market gains, the US January consumer confidence index unexpectedly fell to an 11.5-year low of 84.5, highlighting economic uncertainty that could negatively impact future consumer spending.
- Health Insurance Stocks Under Pressure: The proposal by the US government to keep payments to private Medicare plans flat next year led to a broad decline in health insurance stocks, with UnitedHealth Group forecasting a revenue contraction in 2026, marking the first annual decline in over 30 years, raising further market concerns.
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- Micron's Investment Plan: Micron Technology announced a $24 billion investment in Singapore to expand memory chip capacity, leading to a 5% stock price increase, which not only enhances its competitive position but may also stimulate growth in the related supply chain.
- Consumer Confidence Decline: Despite the stock market gains, the US January consumer confidence index unexpectedly fell to an 11.5-year low of 84.5, indicating economic uncertainty that could negatively impact consumer spending.
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- Micron's Expansion Investment: Micron Technology has commenced construction of an advanced wafer fabrication facility at its existing NAND manufacturing plant in Singapore, with a planned investment of approximately $24 billion over the next decade, leading to a roughly 5% increase in its stock price.
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- UnitedHealth Stock Decline: Shares of UnitedHealth and Humana dropped about 20% after the Centers for Medicare & Medicaid Services proposed a mere 0.09% increase in 2027 Medicare Advantage payment rates, significantly lower than the expected 4% to 6% rise.
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- Health Insurance Sector Pressure: The proposed flat payments to private Medicare plans by the US government have caused UnitedHealth Group to forecast a revenue decline in 2026, marking the first annual contraction in over 30 years, resulting in a stock drop of over 19%, highlighting significant challenges in the industry.
- Economic Data Impact: The ADP report indicates that US private payrolls rose by an average of 7,750 per week in the four weeks ending January 3, the smallest increase in six weeks, which may affect investor confidence in economic recovery.
- Upcoming Economic Indicators: The market is focused on consumer confidence and initial unemployment claims data this week, with the consumer confidence index expected to rise to 91.0, potentially providing support for the market and reflecting consumer optimism about the economic outlook.
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- Boeing's Positive Revenue: Boeing's fourth-quarter revenue reached $23.95 billion, exceeding the $22.6 billion expected by analysts, which boosted its stock by 2%, with the CEO expressing optimism about future prospects.
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