Flex Ltd

Flex Ltd. has agreed to acquire EPC Power for $4.4 billion, a major bet on the power needs of AI infrastructure, with the deal expected to close in the fourth quarter of calendar 2026. EPC Power, which develops power conversion hardware and software for data centers and grids, will become part of Flex's CPI segment, which Flex plans to spin off as an independent publicly traded company in the first quarter of calendar 2027. EPC Power has deployed more than 15 GW across 62 countries and expects U.S. manufacturing capacity to exceed 30 GW by 2027. The acquisition is expected to generate approximately $800 million in revenue in calendar 2026, with about 40% organic revenue growth in 2027 and EBITDA margin expanding to approximately 30% in 2027. Flex's rivals are also making moves: Sanmina reported revenues of $3.46 billion, up 69.7% year over year in the fiscal third quarter, and Vertiv agreed to acquire UtilityInnovation Group for about $1.45 billion in cash plus up to $1.15 billion in performance-based payments. Flex shares have gained 94.9% in the past year, and the Zacks Consensus Estimate for fiscal 2027 earnings has been revised upward over the past 60 days.

Flex Ltd. raised its fiscal 2027 revenue guidance to $33.7-$35.2 billion from $32.3-$33.8 billion, driven by momentum in its Regulated Manufacturing Solutions segment. In the first quarter of fiscal 2027, RMS revenues increased 12% year over year to $2.7 billion, with adjusted operating margin expanding 130 basis points to 6.6%. Management projects RMS revenues to grow in the mid-single-digits to high-single-digits in fiscal 2027, supported by energy infrastructure, robotics, and warehouse automation demand. The company also expects Cloud and Power Infrastructure revenues to grow 65-75%, though free cash flow conversion is projected at roughly 40% due to spin-off costs. Flex shares have gained 8.4% in the past month, and the Zacks Consensus Estimate for fiscal 2027 earnings has been revised upward over the past 60 days.

Cerebras Systems reports second-quarter earnings after the bell today, its second report as a public company, with analysts expecting a loss of roughly 17 cents per share and the company guiding to core revenue of about 194 million dollars, up 88% from a year ago. On prediction market Kalshi, traders are betting on which words CEO Andrew Feldman and his team will say on the call, with AMD leading at 96%, Disaggregated at 90%, and Helios at 89%, reflecting the July partnership with Advanced Micro Devices that splits AI inference. AWS and OpenAI both trade at 94%, with OpenAI holding a 750-megawatt, multi-billion-dollar inference agreement and AWS set to deploy Cerebras systems in its data centers with revenue expected in 2027. Europe sits at 86% as Cerebras targets 200 megawatts of capacity there by the end of 2027, while CrowdStrike trades at 76% and Falcon at 59% after CrowdStrike said in July it will use Cerebras inference for its Falcon AI Detection and Response product. Kimi is a coin flip at 49% as Cerebras serves Moonshot AI's trillion-parameter Kimi K2.6 model at 981 output tokens per second, and Flex trades at 47% as the manufacturing partner adding production lines in Milpitas, California with plans to increase CS-3 capacity roughly sevenfold through 2026. Customer Concentration trades at just 12%, suggesting traders expect the phrase that dogged the IPO roadshow to go unspoken, while the key investor question is whether the guided core gross margin decline to 36% to 38% from about 47% in the first quarter is temporary as Cerebras relies on costly third-party capacity.

Flex reported second-quarter revenue of $7.93 billion, up 20.6% year on year and beating analyst estimates of $7.52 billion, while adjusted earnings per share of $1 also topped expectations. The company issued full-year revenue guidance of $34.45 billion at the midpoint, above the $33.44 billion consensus, and adjusted EPS guidance of $4.58, slightly ahead of forecasts. Management credited strong demand in cloud and power infrastructure, particularly for AI-driven data center power and cooling solutions, and noted that the planned spin-off of that business remains on track. The market reacted cautiously, with shares falling from $113.60 before the release to $104.16.

Flex Ltd. reported first-quarter fiscal 2027 adjusted earnings of $1.00 per share, beating the Zacks Consensus Estimate of 93 cents by 7.5%. Revenues advanced 20.6% to $7.93 billion, topping the consensus mark of $7.58 billion, driven by broad-based segment growth including a 35% expansion in Cloud and Power Infrastructure. The company raised its full-year revenue guidance to a range of $33.7 billion to $35.2 billion from the prior $32.3 billion to $33.8 billion, and lifted adjusted earnings guidance to $4.42 to $4.74 per share from $4.21 to $4.51. For the second quarter, Flex expects revenues between $7.95 billion and $8.25 billion and adjusted earnings of $1.00 to $1.07 per share. Despite the strong results, shares declined around 5% in pre-market trading.

Flex Ltd. is set to report first-quarter fiscal 2027 results on Wednesday before market open, with the Zacks Consensus Estimate projecting revenues of $7.58 billion, a 15.3% increase from the year-ago quarter, and earnings of 93 cents per share, up 29.2% year over year. The company expects net revenues between $1.750 billion and $1.900 billion and adjusted earnings of $2.05 to $2.15 per share. Flex has beaten estimates in each of the last four quarters, delivering an average earnings surprise of 9.47%, and its stock has surged 134.7% over the past year, outperforming the Zacks Electronics - Miscellaneous Products industry's 68.4% gain as well as peers Cisco Systems, Jabil, and Sanmina. However, the Zacks model does not predict an earnings beat this time, as Flex carries an Earnings ESP of -1.29% and a Zacks Rank of 2. The company continues to benefit from robust AI infrastructure demand, with its Cloud and Power Infrastructure business emerging as the primary growth driver, and management targets 65-75% revenue growth for that segment in fiscal 2027, followed by more than 80% growth in fiscal 2028. Flex also completed the acquisition of Electrical Power Products and announced plans to spin off the CPI business into a standalone public company in the first quarter of calendar 2027. While weakness in the lifestyle business, high debt, and competition remain concerns, Flex's strong CPI outlook and reasonable valuation support its long-term prospects.

Cerebras Systems is trading at an 86.78% discount to its estimated intrinsic value following Flex Ltd.'s expansion of manufacturing for the CS-3 AI accelerator in Milpitas, California, which targets roughly seven times higher production capacity through 2026. The stock rebounded 17.92% in a single day to $208.57 but remains down 11.14% over the past 30 days and 32.95% year to date. A widely followed narrative pegs fair value at $415.54, implying a significant valuation gap that depends on aggressive growth and margin assumptions. However, risks include Cerebras Systems' reliance on OpenAI for a large portion of its $24.6 billion backlog and a sizable lock-up expiry in mid-November.

Cerebras Systems stock jumped 11% after the company announced plans to expand data center capacity in Europe and boost manufacturing of its CS-3 chip. The company aims to bring European data center capacity online before the end of 2026, with rapid expansion in France and Scandinavia, and targets total capacity of 200 megawatts by the end of 2027. Additionally, a collaboration with Flex will increase CS-3 production capacity by approximately 7 times by 2026 at Flex's California facility.

Flex shares surged 7.8% after the company announced an expanded manufacturing partnership with Cerebras Systems to scale production of advanced AI supercomputers in the United States. The collaboration will significantly boost output of the Cerebras CS-3 AI accelerator system at Flex's Milpitas, California facilities, with production capacity expected to increase approximately sevenfold through 2026. The expansion is driven by accelerating demand for AI infrastructure and will be supported by new production lines, more floor space, advanced test infrastructure, and additional skilled manufacturing talent.

Flex Ltd. has surged 129.6% over the past six months, outperforming the Zacks Electronics – Miscellaneous Products industry's 52.5% gain and peers like Cisco Systems, Jabil, and Sanmina. The company is benefiting from strong demand in AI data centers and power infrastructure, with its Cloud and Power Infrastructure business securing multiyear contracts including one with Google. Fourth-quarter fiscal 2026 revenue rose 17% year over year to $7.5 billion, while adjusted gross margin reached a record 9.9% and adjusted operating margin hit a record 6.7%. Management targets CPI revenue growth of 65% to 75% for fiscal 2027 and expects overall fiscal 2027 revenue between $32.3 billion and $33.8 billion, with adjusted EPS up 32% at the midpoint. The stock trades at a forward price-to-sales ratio of 1.44, below the industry average of 8.31, and carries a Zacks Rank #1 (Strong Buy).

Flex Ltd. announced the divestiture of its Sheldahl business to Chase Corporation as part of its strategy to optimize its portfolio and focus on higher-growth, higher-margin businesses. Sheldahl designs and manufactures specialized coated films, laminates, and flexible circuit technologies for the aerospace, automotive, industrial, and medical markets. The transaction was completed upon signing, with financial terms not disclosed. On the same day, Flex also announced its selection for inclusion in the S&P 500 Index, effective prior to the opening of trading on June 22, marking a significant milestone for the company.

Flex Ltd. has secured substantial incremental business from multiple hyperscaler and data center customers, including Google, with new awards extending beyond a single customer to encompass neocloud providers, colocation operators, and utility customers. The company stated that these contracts cover power infrastructure, cooling, compute integration, and distributed power solutions, and are already moving into the capital deployment phase. Flex expects its Cloud and Power Infrastructure revenue to grow 65-75% in fiscal 2027, followed by growth of more than 80% in fiscal 2028, with several programs continuing to expand into fiscal 2029. To support this demand, the company is increasing investments throughout fiscal 2027 to expand manufacturing capacity globally, while capital spending is expected to normalize in fiscal 2028. Overall, Flex projects fiscal 2027 revenue between $32.3 billion and $33.8 billion, representing 18% growth at the midpoint, and adjusted EPS to increase 32% at the midpoint.

The global electronics manufacturing services market is projected to grow from USD 648.51 billion in 2025 to USD 853.05 billion by 2030, at a compound annual growth rate of 5.6%. The automotive application segment is expected to record the second-highest CAGR during the forecast period, driven by vehicle electrification, adoption of advanced driver-assistance systems, and integration of connected technologies. Asia Pacific is projected to exhibit the highest regional CAGR, fueled by manufacturing relocations and investments in electronics production. Key players in the market include Flex Ltd., Hon Hai Precision Industry Co., Ltd., Jabil Inc., Pegatron Corporation, and Wistron Corporation.

A $1000 investment in Flex made in June 2016 would be worth $13,059.11 as of June 26, 2026, representing a gain of 1,205.91% excluding dividends. Over the same period, the S&P 500 returned 261.12% and gold returned 193.20%. Flex, a Singapore-based advanced manufacturing solutions provider, reported fiscal 2026 revenues of $27.9 billion across its three segments: Regulated Manufacturing Solutions, Integrated Technology Solutions, and Cloud and Power Infrastructure. The company is benefiting from AI and data center buildout, and plans to spin off its Cloud and Power Infrastructure business to sharpen operational focus.

Flex and Plexus are both benefiting from favorable trends in electronics manufacturing, but Flex appears to be the stronger investment at the moment. Flex is expanding in AI-driven data center infrastructure and plans to spin off its Cloud and Power Infrastructure business, while Plexus is seeing strong program wins across industrial, healthcare, and aerospace markets. Over the past six months, Flex shares have gained 138% and Plexus shares have risen 85.8%. Flex trades at a price-to-book ratio of 10.77 times, higher than Plexus at 5.15 times. Analysts have significantly raised earnings estimates for Flex, which carries a Zacks Rank #1 (Strong Buy), while Plexus holds a Zacks Rank #4 (Sell).

Flex has surged 149.5% year-to-date, far outpacing the average 14.5% gain of the Computer and Technology sector, which comprises 592 stocks and holds a Zacks Sector Rank of #1. The stock carries a Zacks Rank #1 (Strong Buy), and its full-year earnings consensus estimate has risen 27% over the past quarter. Within the sector, Flex belongs to the Electronics - Miscellaneous Products industry, which has returned 69.6% on average this year. Another sector outperformer, Ametek, has gained 14.7% year-to-date and holds a Zacks Rank #2 (Buy), with its current-year EPS estimate up 1.1% over the past three months.

Flex Ltd. has been selected to join the S&P 500 Index, effective before the opening of trading on Monday, June 22. The announcement was made on June 9, 2026. Earlier in June, Barclays raised its price target on Flex to $203 from $174 and maintained an Overweight rating, citing analysis of the company's AI and other business segments. Last month, BofA increased its price target to $180 from $75 with an Overweight rating, while KeyBanc noted the shares continued to rise following the company's fourth-quarter report and the announcement of a planned spin-off of its Data Center business.