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Can Flex's Hyperscaler Wins Drive Sustained Revenue Growth?
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Key Takeaways
FLEX secured new multiyear awards across hyperscalers, neoclouds, colocation and utility customers.
Flex expects CPI revenue to grow 65-75% in fiscal 2027 and more than 80% in fiscal 2028.
Flex projects 18% revenue growth and 32% adjusted EPS growth at the fiscal 2027 midpoint.
Flex Ltd.’s (FLEX - Free Report) growth is being driven by expanding business from hyperscalers and AI infrastructure customers, supported by multiyear engagements spanning power infrastructure, thermal systems and complex hardware manufacturing. The company recently secured substantial incremental business from several hyperscaler and data center customers, including Google, with these projects already moving into the capital deployment phase. To support this demand, Flex is increasing investments throughout fiscal 2027 to expand manufacturing capacity across its global footprint, while expecting capital spending to normalize in fiscal 2028.
The company stated that the new awards extend beyond a single customer and include multiple hyperscalers, neocloud providers, colocation operators and utility customers. These contracts cover a broad range of offerings, including power infrastructure, cooling, compute integration and distributed power solutions. Flex noted that it is expanding factory capacity to fulfill these multiyear commitments and expects Cloud and Power Infrastructure (CPI) revenue to grow 65-75% in fiscal 2027, followed by growth of more than 80% in fiscal 2028. It also indicated that several of these programs are expected to continue expanding into fiscal 2029.
Flex further highlighted that its integrated portfolio across power, thermal management and compute integration supports customers seeking end-to-end infrastructure solutions. The company also strengthened its power portfolio with the acquisition of Electrical Power Products (EP2), enhancing its capabilities in grid modernization and electrification.
Flex expects its momentum to continue with fiscal 2027 revenue projected between $32.3 billion and $33.8 billion, representing 18% growth at the midpoint, while adjusted EPS is expected to increase 32% at the midpoint. The CPI business alone is forecast to deliver revenue growth of 65% to 75% for fiscal 2027, followed by more than 80% growth in fiscal 2028, supported by multiyear contracts, expanding AI infrastructure demand and investments that are expected to drive further margin expansion. Management also expects capital expenditures to normalize after fiscal 2027 while maintaining strong growth and cash generation.
Taking a Look at FLEX’s Competitors
Jabil Inc. (JBL - Free Report) continues to benefit from sustained demand across AI data center infrastructure, capital equipment and warehouse automation, while improving trends in the automotive and select consumer markets are broadening its growth profile. The company's diversified end-market strategy, global manufacturing footprint and expanding AI capabilities support long-term scalability and operating efficiency. For the fourth quarter of fiscal 2026, management projects revenues between $9.2 billion and $10 billion. For fiscal 2026, the company expects revenues of approximately $35 billion, a core operating margin of about 5.8%, core earnings per share of roughly $12.70 and adjusted free cash flow exceeding $1.4 billion.
Sanmina Corporation (SANM - Free Report) is benefiting from rising demand for cloud and AI infrastructure programs, supported by its vertically integrated manufacturing model and broad global footprint. The company continues to deepen customer relationships through end-to-end design, production and supply chain capabilities, while the ZT Systems acquisition expands its exposure to higher-growth accelerated compute markets. Its strong cash flow strengthens financial flexibility, supporting debt reduction, strategic investments and capital returns. A diversified presence across industrial, medical, defense and automotive markets provides stability against weaker areas of demand. For the third quarter of fiscal 2026, the company guided revenues of $3.2-$3.5 billion. For fiscal 2026, Sanmina expects revenues of $13.7-$14.3 billion.
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Can Flex's Hyperscaler Wins Drive Sustained Revenue Growth?
Key Takeaways
Flex Ltd.’s (FLEX - Free Report) growth is being driven by expanding business from hyperscalers and AI infrastructure customers, supported by multiyear engagements spanning power infrastructure, thermal systems and complex hardware manufacturing. The company recently secured substantial incremental business from several hyperscaler and data center customers, including Google, with these projects already moving into the capital deployment phase. To support this demand, Flex is increasing investments throughout fiscal 2027 to expand manufacturing capacity across its global footprint, while expecting capital spending to normalize in fiscal 2028.
The company stated that the new awards extend beyond a single customer and include multiple hyperscalers, neocloud providers, colocation operators and utility customers. These contracts cover a broad range of offerings, including power infrastructure, cooling, compute integration and distributed power solutions. Flex noted that it is expanding factory capacity to fulfill these multiyear commitments and expects Cloud and Power Infrastructure (CPI) revenue to grow 65-75% in fiscal 2027, followed by growth of more than 80% in fiscal 2028. It also indicated that several of these programs are expected to continue expanding into fiscal 2029.
Flex further highlighted that its integrated portfolio across power, thermal management and compute integration supports customers seeking end-to-end infrastructure solutions. The company also strengthened its power portfolio with the acquisition of Electrical Power Products (EP2), enhancing its capabilities in grid modernization and electrification.
Flex expects its momentum to continue with fiscal 2027 revenue projected between $32.3 billion and $33.8 billion, representing 18% growth at the midpoint, while adjusted EPS is expected to increase 32% at the midpoint. The CPI business alone is forecast to deliver revenue growth of 65% to 75% for fiscal 2027, followed by more than 80% growth in fiscal 2028, supported by multiyear contracts, expanding AI infrastructure demand and investments that are expected to drive further margin expansion. Management also expects capital expenditures to normalize after fiscal 2027 while maintaining strong growth and cash generation.
Taking a Look at FLEX’s Competitors
Jabil Inc. (JBL - Free Report) continues to benefit from sustained demand across AI data center infrastructure, capital equipment and warehouse automation, while improving trends in the automotive and select consumer markets are broadening its growth profile. The company's diversified end-market strategy, global manufacturing footprint and expanding AI capabilities support long-term scalability and operating efficiency. For the fourth quarter of fiscal 2026, management projects revenues between $9.2 billion and $10 billion. For fiscal 2026, the company expects revenues of approximately $35 billion, a core operating margin of about 5.8%, core earnings per share of roughly $12.70 and adjusted free cash flow exceeding $1.4 billion.
Sanmina Corporation (SANM - Free Report) is benefiting from rising demand for cloud and AI infrastructure programs, supported by its vertically integrated manufacturing model and broad global footprint. The company continues to deepen customer relationships through end-to-end design, production and supply chain capabilities, while the ZT Systems acquisition expands its exposure to higher-growth accelerated compute markets. Its strong cash flow strengthens financial flexibility, supporting debt reduction, strategic investments and capital returns. A diversified presence across industrial, medical, defense and automotive markets provides stability against weaker areas of demand. For the third quarter of fiscal 2026, the company guided revenues of $3.2-$3.5 billion. For fiscal 2026, Sanmina expects revenues of $13.7-$14.3 billion.
Flex Price Performance, Valuation and Estimates
Shares of FLEX have surged 136.3% in the past three months against the Electronics - Miscellaneous Products industry’s growth of 64.8%.
Image Source: Zacks Investment Research
FLEX trades at a forward 12-month price-to-earnings (P/E) ratio of 35.2, below the industry’s 42.43.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for FLEX earnings for fiscal 2026 has been revised upward over the past 60 days.
Image Source: Zacks Investment Research
FLEX currently has a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.