What Happened?
Shares of electronic manufacturing services company Plexus (NASDAQ: PLXS) jumped 5.4% in the morning session after the company reported better-than-expected second-quarter profitability and a record number of new manufacturing program wins, leading to a positive outlook for the fiscal year.
Plexus announced it secured a record $355 million in new manufacturing programs during the quarter, with its qualified opportunity pipeline growing 11% to $4.0 billion. The company saw strong performance across its business segments, with industrial revenue increasing 12% and aerospace & defense revenue jumping 19% from the previous quarter. Profitability also exceeded expectations, with a non-GAAP operating margin of 6%, which was at the top end of its guidance. This resulted in non-GAAP earnings per share of $2.05, surpassing the company's own forecast. Based on this momentum, Plexus now anticipates achieving revenue growth in the mid-teens or higher for fiscal 2026.
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What Is The Market Telling Us
Plexus’s shares are somewhat volatile and have had 10 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 30 days ago when the stock gained 4% on the news that investor sentiment turned positive on hopes of a potential ceasefire in Iran, which also contributed to easing oil prices.
Wall Street started the new quarter with a tech-led rally, as major indices like the S&P 500 and Nasdaq Composite posted significant gains. The optimism stemmed from news of potential de-escalation in geopolitical tensions, which often encourages a 'risk-on' environment. In such a climate, investors are more willing to move capital into growth-oriented assets, such as technology stocks, which powered the market's upward move. The broad-based gains across sectors indicated a decisive shift in market sentiment, away from the caution that had prevailed previously.
Plexus is up 72.8% since the beginning of the year, and at $263.11 per share, has set a new 52-week high. Investors who bought $1,000 worth of Plexus’s shares 5 years ago would now be looking at an investment worth $2,825.
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