Flex Ltd. has rallied 79.9% over the past year to a new 52-week high as investors reward its pivot into higher-value, AI-driven data center infrastructure—highlighted by a new pre-engineered AI platform, an NVIDIA partnership on 800‑volt DC factories and a cooling JV with LG—that management says can speed deployments by up to 30%. Financials underpin the move: Q2 FY2026 revenues rose 4% YoY to $6.8 billion, non‑GAAP gross and operating margins expanded to 9.3% and 6%, respectively, and the company generated a record $1.1 billion of free cash flow in FY2025 while guiding FY2026 revenue to $26.7–$27.3 billion and adjusted EPS of $3.09–$3.17. Trading at a forward P/E of 20.4 below the industry average, with active buybacks and strong FCF conversion, Flex is presented as an attractive long‑term opportunity—though investors should weigh execution risks including a Ukraine facility shutdown, FX headwinds and near‑term softness in automotive.
Flex Ltd. has delivered a 79.9% one‑year stock rally, reaching a 52‑week high of $70.37 and closing at $68.50, driven by a strategic pivot into higher‑value, AI‑driven data‑center infrastructure. Management highlights a new pre‑engineered AI infrastructure platform that can accelerate deployments by up to 30%, a partnership with NVIDIA on 800‑volt DC AI factories and a co‑development agreement with LG for modular cooling, with the data‑center segment forecast to grow at least 35% this year. Operational metrics support the narrative: Q2 FY2026 revenue rose 4% year‑over‑year to $6.8 billion, non‑GAAP gross margin expanded 80 basis points to 9.3% and non‑GAAP operating margin expanded 55 basis points to 6%. Cash generation is a clear strength, with record $1.1 billion FCF in FY2025, $305 million adjusted FCF in Q2 and management targeting >80% FCF conversion for FY2026, enabling $1.3 billion of buybacks in FY2025 and $297 million repurchased in Q2. Company guidance for FY2026 is $26.7–$27.3 billion in revenue, adjusted operating margin of 6.2–6.3% and adjusted EPS $3.09–$3.17, and the stock trades at a forward P/E of 20.35 versus an industry average of 24.99. Key downside risks are execution of AI projects, a Ukraine facility shutdown, unfavorable FX and softness in automotive; investors should also monitor competitive momentum from peers Jabil, Sanmina and Celestica.
AI-powered research, real-time alerts, and portfolio analytics for institutional investors.
Overall Sentiment
moderately positive
Sentiment Score
0.63
Ticker Sentiment
