Flex's CPI Spin-Off Could Reshape Its AI Infrastructure Growth Story
Flex Ltd.FLEX is preparing to separate its Cloud and Power Infrastructure (CPI) business into an independent, publicly traded company focused on digital and electrical infrastructure for AI data centers and other mission-critical applications.
The planned split could leave investors assessing two businesses with different growth rates, capital needs and operating priorities. CPI is entering the separation from a position of rapid expansion, while the remaining Flex business is set to emphasize diversified manufacturing, portfolio discipline and cash generation.
Flex Is Separating Its Fastest-Growing Business
CPI represented 24% of Flex’s fiscal 2026 revenues. In the first quarter of fiscal 2027, the segment generated $2.20 billion in revenues, up 35% year over year, as Power grew strongly and Cloud & Cooling continued to ramp new programs.
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Management expects CPI revenues to increase 65%-75% in fiscal 2027. That outlook places the fastest-growing part of Flex inside the planned standalone company and makes the separation central to how investors may assess the company’s AI infrastructure exposure.
FLEX’s Spin-Off Sharpens Two Different Profiles
The planned company is designed around power, compute and thermal management, with integrated infrastructure spanning critical and embedded power, liquid cooling and compute integration. Flex expects the business to pursue faster-growth opportunities tied to AI data-center and electrical infrastructure spending.
The remaining Flex operation will keep advanced manufacturing exposure across diversified markets, with portfolio optimization and cash generation taking greater priority. Jabil Inc. JBL, an electronics manufacturing peer, recently said AI infrastructure demand remained extremely strong and raised its full-year AI-related revenue outlook. Celestica Inc. CLS also raised its 2026 outlook and expects growth to accelerate in 2027 on very strong customer demand.
FLEX currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Its Value Score of B, VGM Score of B and Momentum Score of A are favorable, while the Growth Score of C is less supportive.
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