Flex (FLEX), a technology manufacturing company, is strengthening its position in the artificial intelligence (AI) data-center infrastructure market as hyperscalers around the world accelerate investments in increasingly power-intensive, high-density facilities. The company is leveraging its Cloud and Power Infrastructure (CPI) segment— together with its established power, cooling, and compute capabilities — to address the growing infrastructure demands created by AI. Most recently, the strategy took a significant step forward with Flex’s definitive agreement to acquire EPC Power for $4.4 billion.
The transaction is expected to close in the fourth quarter of 2026. Following the acquisition, EPC Power will become part of Flex’s CPI segment, which the company plans to spin off as an independent publicly traded company in Q1 2027.
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The acquisition also brings meaningful growth potential. EPC Power is projected to generate roughly $800 million in 2026 revenue, with about 40% organic growth and approximately 30% EBITDA margins in 2027.
By combining EPC Power’s power-conversion expertise with Flex’s broader infrastructure capabilities, the deal could expand Flex’s reach across the data-center stack and give its AI infrastructure strategy considerably more depth. Let's take a closer look.
About Flex Stock
Headquartered in Austin, Texas, Flex designs, engineers, manufactures, and assembles technology products for customers. With a market capitalization of nearly $40 billion, the company manages supply chains and product lifecycles from development through delivery.
Flex's portfolio spans computing and networking hardware, automotive electronics, medical devices, industrial systems, liquid-cooling solutions, and power infrastructure. The company also provides testing and logistics services, giving it exposure to multiple stages of the technology manufacturing ecosystem.
Investors have rewarded that positioning. FLEX stock has gained 102% over the past year and roughly 93% so far in 2026.
www.barchart.com The strong share-price performance has also pushed the valuation higher. FLEX stock currently trades at 26.3 times forward earnings, which is above both the industry average and its own five-year average multiple, assigning Flex a premium valuation.
Flex Surpasses Q1 Earnings
Flex reported its Q1 fiscal 2027 earnings results on July 29, delivering a strong opening quarter. Net sales came in at $7.9 billion, up 21% year-over-year (YOY) and coming in ahead of Wall Street’s forecast of $7.52 billion. At the segment level, Cloud and Power Infrastructure revenue expanded 35% YOY to $2.2 billion. Integrated Technology Solutions generated revenue of $3.1 billion, up 20% YOY, supported by stronger demand for advanced networking. Meanwhile, Regulated Manufacturing Solutions revenue rose 12% YOY to $2.7 billion, helped by strength in the Industrial business.
Profitability also moved in the right direction. Non-GAAP operating income increased 35% YOY to $534 million, producing a non-GAAP operating margin of 6.7%. Non-GAAP net income climbed 36% from the year-ago figure to $374 million. Moreover, non-GAAP EPS reached $1 per share, up 39% YOY and beating analysts' estimate of $0.92 per share.
Cash flow, however, was considerably softer. Operating cash flow stood at $276 million, while free cash flow declined 85% YOY to $41 million. The decrease primarily reflected higher capital expenditures and acquisition-related investment. Flex also incurred substantial costs associated with its planned CPI spinoff.
Looking ahead, management expects Q2 net sales to range from $7.95 billion to $8.25 billion, with adjusted EPS of $1 to $1.07. At the midpoint, the guidance implies roughly 32% EPS growth. For fiscal 2027, Flex raised its outlook to net sales of $33.7 billion to $35.2 billion and adjusted EPS of $4.42 to $4.74, representing 39% YOY earnings growth at the midpoint.
Analysts also see strong earnings growth ahead. Q2 EPS is expected to increase 39% YOY to $0.97, while fiscal 2027 EPS is projected to grow 43% from the prior year to $4.27. The growth outlook strengthens further in fiscal 2028, with forecasts calling for EPS to rise 44% YOY to $6.15.
What Do Analysts Expect for Flex Stock?
Overall, Wall Street has a consensus “Strong Buy” rating for FLEX stock. Of the 12 analysts covering the stock, 10 have a “Strong Buy” rating, one analyst recommends a “Moderate Buy,” and one has a “Hold" rating.
To that end, the average price target of $159.54 implies potential upside of 37% from current levels. Meanwhile, the Street-high price target of $200 points to a possible gain of 72% from current levels.
www.barchart.com On the date of publication, Aanchal Sugandh did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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