The biggest bottleneck in the AI buildout isn't just chips. It is the power and cooling needed to keep them from melting. Most people are chasing NVDA or the hyperscalers, but Flex ($FLEX) is the one actually building the vertical power-to-chip infrastructure.
Management just dropped a massive catalyst: they’re spinning off the Cloud and Power Infrastructure (CPI) segment into its own company in early 2027. Right now, this hyper-growth AI business is hidden behind a "boring" legacy manufacturing valuation. Once the spin-off happens, it becomes a pure-play AI juggernaut that institutions will have to chase.
The Numbers:
Earnings Smash: Just hit 6.7% adjusted margins a full year early.
Guidance: Raised FY27 EPS to $4.21–$4.51 (consensus was only $3.60).
Growth: The spin-off is projecting 65-75% revenue growth for FY27 and over 80% for FY28.
The logic here is identical to the $MU find the supply chain bottleneck and buy the provider with the cleanest exposure. When companies like Google or Meta need liquid cooling and high-density power for their Blackwell clusters, they go to Flex.
While competitors like Celestica ($CLS) have already seen their stocks go up , $FLEX is still trading at a discount. The market is notoriously slow to price in spin-offs. This is a clear re-rating play as the AI power segment becomes the dominant part of the valuation.
The Target: $350. When "SpinCo" get priced in by market.
I have \~400 shares and adding more.
Posted by wantedmama55
1 Comment
100% in one month – great entry 🙂