We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Can Flex Ride the AI Supercomputer Boom With Cerebras Alliance?
Read MoreHide Full Article
Key Takeaways
Flex expanded its Cerebras partnership to increase CS-3 AI system production about sevenfold by 2026.
FLEX is investing in new production lines, testing, validation and logistics at its Milpitas facility.
Flex is strengthening its AI manufacturing position through specialized wafer-scale system production.
As demand for AI computing continues to outpace supply, companies capable of manufacturing advanced AI systems are becoming essential players in the industry's growth. In an encouraging development, Flex Ltd. (FLEX - Free Report) has expanded its manufacturing partnership with Cerebras Systems (CBRS - Free Report) to dramatically increase production of the Cerebras CS-3, advanced AI accelerator systems. The collaboration aims to boost production capacity by approximately seven times by 2026, strengthening America's position in advanced AI hardware manufacturing while creating new growth opportunities for Flex.
This initiative enables Flex to manufacture substantially more Cerebras CS-3 systems from its Milpitas, CA, facility. To support this expansion, Flex is investing in multiple new production lines, larger manufacturing floor space, advanced automated testing infrastructure, enhanced burn-in and validation facilities, as well as additional warehouse and logistics capacity. These investments position Flex to capitalize on one of the fastest-growing segments of the technology industry. Flex, together with Cerebras, will develop specialized manufacturing processes for wafer-scale AI systems, creating high barriers to entry and strengthening its position in the AI hardware supply chain.
Flex’s global manufacturing scale remains a key advantage. Its footprint supports regionalization by bringing manufacturing closer to end markets, reducing logistics risk and meeting evolving trade requirements. Management positions Flex for the AI era through integrated capabilities across compute integration, cooling and power, and it has cited AI-enabled systems to standardize processes and lift factory productivity. The company also continues to highlight North America as an investment focus, supported by prior progress in shifting revenue mix toward the Americas.
FLEX's Competitive Edge Under the Spotlight
Jabil Inc. (JBL - Free Report) diversified end-market strategy, global manufacturing footprint and expanding AI capabilities support long-term scalability and operating efficiency. Jabil’s worldwide manufacturing footprint and connected factory network provide meaningful scale advantages. It continues to expand capacity in North Carolina, Memphis, India and other locations while maintaining an asset-light model. In June, Jabil collaborated with Adani Group in India to establish a world-class, vertically integrated AI data center infrastructure manufacturing platform in the country. The focus is on manufacturing AI racks and several supporting infrastructures that are needed for AI data centers.
Celestica (CLS - Free Report) benefits from strong AI data center and cloud demand, driving growth and expanding market prospects. Its focus is on product diversification and increasing its presence in high-value markets is positive. Its strong research and development foundations allow it to produce high-volume electronic products and highly complex technology infrastructure products for a wide range of industries. Its advanced manufacturing expertise strengthens its ability to meet evolving AI infrastructure requirements. Celestica currently anticipates 2026 revenues of $19 billion (up from $17 billion expected earlier), adjusted earnings of $10.15 per share (up from $8.75), while maintaining its prior free cash flow outlook of $500 million.
Valuation-wise, FLEX seems attractive, as suggested by the Value Score of A. FLEX trades at a forward 12-month price-to-earnings (P/E) ratio of 30.11, below the industry’s 33.97.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for FLEX earnings for fiscal 2027 has been unchanged over the past 60 days.
View the Zacks #1 Rank List
Image: Bigstock
Can Flex Ride the AI Supercomputer Boom With Cerebras Alliance?
Key Takeaways
As demand for AI computing continues to outpace supply, companies capable of manufacturing advanced AI systems are becoming essential players in the industry's growth. In an encouraging development, Flex Ltd. (FLEX - Free Report) has expanded its manufacturing partnership with Cerebras Systems (CBRS - Free Report) to dramatically increase production of the Cerebras CS-3, advanced AI accelerator systems. The collaboration aims to boost production capacity by approximately seven times by 2026, strengthening America's position in advanced AI hardware manufacturing while creating new growth opportunities for Flex.
This initiative enables Flex to manufacture substantially more Cerebras CS-3 systems from its Milpitas, CA, facility. To support this expansion, Flex is investing in multiple new production lines, larger manufacturing floor space, advanced automated testing infrastructure, enhanced burn-in and validation facilities, as well as additional warehouse and logistics capacity. These investments position Flex to capitalize on one of the fastest-growing segments of the technology industry. Flex, together with Cerebras, will develop specialized manufacturing processes for wafer-scale AI systems, creating high barriers to entry and strengthening its position in the AI hardware supply chain.
Flex’s global manufacturing scale remains a key advantage. Its footprint supports regionalization by bringing manufacturing closer to end markets, reducing logistics risk and meeting evolving trade requirements. Management positions Flex for the AI era through integrated capabilities across compute integration, cooling and power, and it has cited AI-enabled systems to standardize processes and lift factory productivity. The company also continues to highlight North America as an investment focus, supported by prior progress in shifting revenue mix toward the Americas.
FLEX's Competitive Edge Under the Spotlight
Jabil Inc. (JBL - Free Report) diversified end-market strategy, global manufacturing footprint and expanding AI capabilities support long-term scalability and operating efficiency. Jabil’s worldwide manufacturing footprint and connected factory network provide meaningful scale advantages. It continues to expand capacity in North Carolina, Memphis, India and other locations while maintaining an asset-light model. In June, Jabil collaborated with Adani Group in India to establish a world-class, vertically integrated AI data center infrastructure manufacturing platform in the country. The focus is on manufacturing AI racks and several supporting infrastructures that are needed for AI data centers.
Celestica (CLS - Free Report) benefits from strong AI data center and cloud demand, driving growth and expanding market prospects. Its focus is on product diversification and increasing its presence in high-value markets is positive. Its strong research and development foundations allow it to produce high-volume electronic products and highly complex technology infrastructure products for a wide range of industries. Its advanced manufacturing expertise strengthens its ability to meet evolving AI infrastructure requirements. Celestica currently anticipates 2026 revenues of $19 billion (up from $17 billion expected earlier), adjusted earnings of $10.15 per share (up from $8.75), while maintaining its prior free cash flow outlook of $500 million.
Flex Price Performance, Valuation and Estimates
Shares of FLEX have gained 168.1% in the past year compared with the Electronics - Miscellaneous Products industry’s growth of 83%.
Image Source: Zacks Investment Research
Valuation-wise, FLEX seems attractive, as suggested by the Value Score of A. FLEX trades at a forward 12-month price-to-earnings (P/E) ratio of 30.11, below the industry’s 33.97.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for FLEX earnings for fiscal 2027 has been unchanged over the past 60 days.
Image Source: Zacks Investment Research
FLEX currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.