Flex Ltd. ((FLEX Quick QuoteFLEX - Free Report) ) recently unveiled its Modular Rack-Level Cooling Distribution Unit (CDU), developed by its liquid cooling subsidiary, JetCool. This new solution is available immediately and represents the latest addition to Flex’s expanding cooling portfolio. Also, it underscores Flex’s broader strategy to provide comprehensive, vertically integrated cooling infrastructure for next-generation data center needs. Moreover, Flex plans to release a dedicated in-row CDU by April 2026, showcasing its long-term commitment to offering a complete range of scalable cooling solutions.

A key feature of Flex’s new CDU is its modular architecture. With the advent of AI, HPC and hyperscale workloads, data centers require cooling systems that scale efficiently without driving up costs or wasting energy. Its features directly address the core issues of today’s data center operators: scalability, efficiency, flexibility and ease of integration.

Key Features of Flex’s Modular Rack-Level CDU

The state-of-the-art CDU supports configurations of 2 to 6 CDUs per rack, ranging from 600 kW to 1.8 MW of cooling and operates at 1–1.5 LPM/kW. This ensures compatibility with a wide range of hardware and workload intensities, preserving valuable rack space to maximize compute density per floor tile. In addition, it allows mixed configurations of CDUs, servers and storage, all managed with intelligent manifolding and matches cooling output to real-time demand, reducing waste and cutting operating costs.

Another differentiator is its vertically integrated approach to liquid cooling. Flex’s liquid cooling portfolio is designed for seamless scalability and ease of operation, offering a complete end-to-end solution tailored to modern data center needs. By standardizing design elements across its CDU range and producing them in-house, Flex streamlines vendor management, shortens deployment timelines and guarantees uniform quality.

This vertical integration also streamlines procurement and maintenance, enabling operators to roll out high-performance cooling more quickly and with reduced risk. FLEX anchors its integrated approach with robust warranty coverage and worldwide support. By designing, testing and manufacturing every component in-house, the company streamlines deployment and reduces vendor dependencies, enabling customers to transition from planning to implementation more quickly and with greater confidence.

Flex Targets Rapid Growth in Data Center Market

Flex is expanding aggressively into the high-growth data center market. In the cloud, it delivers vertically integrated IT hardware and infrastructure solutions, including metal fabrication, custom rack assembly and advanced direct-to-chip liquid cooling. In power, its portfolio spans the full stack, from board-level power modules that regulate chip-level performance to facility-scale modular power pods.

Recently, FLEX’s subsidiary, FLEX Power Modules, announced a partnership with Renesas to develop next-generation board-mounted power management solutions. Flex Power Modules, a global leader in advanced power conversion solutions, brings scalable data center manufacturing capabilities, innovative power and cooling products, and end-to-end lifecycle services.

It remains on track to generate approximately $6.5 billion in revenues from data centers, indicating year-over-year growth of at least 35% and accounting for 25% of its total revenues.

Macro Turbulence Pose Concerns

Flex faces headwinds from an uncertain macroeconomic environment and shifting trade policies. The company expects to incur tariff-related costs from sourcing raw materials in China and other impacted regions, which it plans to pass on to customers. Nevertheless, these tariffs could affect cash flow timing and put slight pressure on margins. While Flex is implementing proactive pricing measures to offset these impacts, tariffs remain a notable challenge to overall performance.

For fiscal 2026, the company expects most tariff costs to be passed through, backed by strong contractual protections. In the Agility Solutions segment, indirect tariff exposure in the Lifestyle unit could influence consumer sentiment. It also faces intensifying competition, which can negatively impact contract wins and hurt top-line growth.

How FLEX’s Peers are Placed in the Broader Tech Space

St. Petersburg, FL-based Jabil Inc. ((JBL Quick QuoteJBL - Free Report) ) is one of the largest global suppliers of electronic manufacturing services. Jabil’s revenue is poised to gain from robust demand in AI data center infrastructure, capital equipment and warehouse automation markets. Over the long term, the company stands to benefit from the widespread adoption of 5G and cloud computing. Strong demand across key end markets, coupled with efficient operations and effective supply chain management, is supporting growth. Jabil’s diverse portfolio across multiple business sectors also provides resilience against macroeconomic and geopolitical uncertainties.

However, Jabil faces headwinds from softness in several end markets. Increased competition in the electronics manufacturing services sector and reliance on concentrated customers remain key challenges.

Ontario, Canada-based Celestica ((CLS Quick QuoteCLS - Free Report) ) is one of the largest electronics manufacturing services companies in the world, primarily serving original equipment manufacturers, cloud-based and other service providers and enterprises from several industries.

The growing proliferation of AI-based applications and generative AI tools across industries presents a solid growth opportunity for Celestica. Its focus on product diversification and increasing its presence in high-value markets is positive. CLS’ strong liquidity better positions it to navigate economic downturns and capitalize on emerging growth opportunities in the electronics manufacturing service industry. Backed by robust demand for networking products and growing AI-driven data center investments across industries, Celestica presented a bullish outlook for 2025. It currently anticipates 2025 revenues to be approximately $11.55 billion, up from the previous projection of $10.85 billion. Non-GAAP adjusted earnings are expected to be $5.50 per share, up from the previous view of $5.00.

However, Celestica faces stiff competition from industry giants like Foxconn, Jabil, Flex Ltd. and Sanmina Corporation. Apart from this, several smaller companies operating at a regional level also intensify competition. Persistent weakness in the ATS segment over the past few quarters is an added concern.

Olathe, Kansas-based Garmin, Ltd. ((GRMN Quick QuoteGRMN - Free Report) ) is an original equipment manufacturer (OEM) of navigation and communication equipment that incorporates the global positioning system (GPS)-based technology. Garmin is seeing robust growth in both its Fitness and Auto OEM segments. The Fitness segment is fueled by strong demand for advanced wearables, while Auto OEM revenue benefits from higher shipments of domain controllers. Additional growth in the Aviation, Marine and Outdoor segments adds further upside. Rising demand in the Americas and EMEA regions also supports performance. Garmin’s ongoing emphasis on innovation, diversification and market expansion across all business lines is notable.

However, macro headwinds, a slowing economy, increasing competition and pricing pressures continue to hurt on its performance.