We think SANM will stand to benefit from the announced partnership between Advanced Micro Devices (NASDAQ: AMD; NC) and OpenAI to build data centers that run on AMD processors. We increase our price target based on Sanmina's recently announced acquisition of ZT Systems. While we do not include the pro forma estimates in our model yet, we assign a premium valuation multiple to give the company credit for the acquisition, which it expects to close by the end of the year. In May, SANM announced it is acquiring ZT Systems' manufacturing business from AMD. However, AMD would retain ZT Systems' AI design business, with SANM as the partner of choice to improve deployment and speed of data center rack systems for cloud customers. At the time of the acquisition, management noted it expects ZT to help Sanmina double its revenue base over the next three years. The company expects the deal to close by the end of calendar 2025, generate $5-$6 billion in annual revenue and be accretive to EPS in the first year. SANM remains net cash positive and has one of the best balance sheets among its peers. It has secured financing from Bank of America (NYSE: BAC, NC) to finance the deal. Management noted it is targeting a net leverage ratio of 1x-2x. To derive our increased $167 price target (was $109) we apply a 25x on our F2027 EPS estimate of $6.75. We previously used a 16x multiple on the same EPS projection. Our moderate risk rating reflects Sanmina's sustained profitability, cash flow generation and industry-leading balance sheet.