Is Flex (FLEX) Quietly Rebuilding Its Investment Story Around a Data Center Pivot?

• Recently, analysts highlighted Flex Ltd.’s push into the data center market, where the company expects about US$6.50 billion in revenue and at least 35% yearly growth, supported by its regional manufacturing footprint and automation capabilities.
• At the same time, Flex has been characterized as a bargain stock with fast-paced momentum, underpinned by upward earnings estimate revisions and a favorable analyst ranking, suggesting its expanding data center exposure is reshaping how investors view the business mix.
• We’ll now examine how Flex’s ambitious US$6.50 billion data center revenue goal could influence its broader investment narrative and risk profile.

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Flex Investment Narrative Recap

To own Flex, you need to believe its shift toward higher value, data center infrastructure can offset structurally thin margins and cyclical end markets. The recent spotlight on its US$6.50 billion data center ambition reinforces that the key near term catalyst is execution on this growth, while customer concentration and potential insourcing by hyperscalers remain the biggest risks. The news itself does not materially change those core drivers, but it sharpens investor focus on whether Flex can scale this segment profitably.

In that context, Flex’s favorable analyst ranking and earnings estimate revisions tie directly into the data center story, as they reflect growing confidence that this higher growth, higher margin segment can reshape the business mix. With shares having risen sharply over the past year and buybacks ongoing, the question for investors is how much of the expected data center ramp and automation driven efficiency is already reflected in the price, and how exposed that optimism is to a slowdown in data center demand or a shift to in house manufacturing by key customers.

Yet behind the promising data center growth, investors should be aware of the concentration risk if a major hyperscaler decides to...

Read the full narrative on Flex (it's free!)

Flex's narrative projects $29.1 billion revenue and $1.3 billion earnings by 2028.

Uncover how Flex's forecasts yield a $73.51 fair value, a 14% upside to its current price.

Exploring Other Perspectives

Five members of the Simply Wall St Community currently see Flex’s fair value between US$50.97 and US$78, reflecting a broad spread of expectations. Against that backdrop, Flex’s reliance on a small group of hyperscaler and colo data center customers could meaningfully influence how these different valuation views play out over time.

Explore 5 other fair value estimates on Flex - why the stock might be worth 21% less than the current price!

Build Your Own Flex Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Flex research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.
• Our free Flex research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Flex's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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