FLEX

In Tech, Semis +1% continuing to rally on the back of Korea’s KOSPI’s 7% gain. Overall, earnings mixed overnight in the space with SKHY, VRT, GEV, FLEX, APH all betterand STX, NXPI, TER, FFIV mixed.

The stock recovered some of its previous day's losses, benefiting from positive sentiment in the contract manufacturing sector.

Freedom remains bullish into the November Analyst Day, seeing Axiom margin ramp as a key upside driver.

Management has guided Axiom revenue growth to 65%+ in FY27 and ~80% in FY28, with Freedom seeing potential upside in both Axiom and the legacy EMS business post-spin.

The RemainCo is expected to drive higher-quality growth and margins by mixing towards higher-value businesses such as Advanced Networking, Energy Infrastructure, Medical Devices, Drug Delivery, SatCom, and Robotics.

Advanced Networking is expected to retain meaningful AI exposure and grow double digits with above-company margins.

RemainCo should benefit from AI-driven grid/power investment even after proprietary power products move to SpinCo.

Further upside is expected from capital reallocation, productivity, and portfolio pruning, with RemainCo targeting a more capital-light model, ~2% CapEx, and 80%+ long-term FCF conversion.

Flex's planned spin-off of its Cloud and Power Infrastructure business into Axiom Solutions International is expected to create a new public company focused on AI/data-center deployments.

The company provided new information on its spin-off, with Cloud and Power Infrastructure to be named Axiom Solutions International, targeting separation in 1Q27, which will combine power, cooling, and compute infrastructure for AI/data-center deployments.

Freedom Capital upgraded the company to Buy and raised its price target to $150 from $144, citing greater confidence in valuation and the planned separation of its AI infrastructure business.

The firm is particularly bullish on the spin-off, which could improve strategic focus, provide clearer valuation transparency, and unlock value for shareholders.

JPM identifies the company as a key beneficiary of the evolving AI datacenter power architecture, as the industry shifts from component-level procurement to integrated, system-level power solutions.

Its broad portfolio across embedded power, critical power, and system integration positions it well as customers increasingly seek turnkey power infrastructure.

The transition to 800V architectures, while gradual, has a clear long-term direction and is expected to accelerate as rack power requirements continue to rise.

The shift from traditional 48V architectures to 800V power delivery in AI datacenters creates a multi-billion-dollar opportunity, driven by rising rack power requirements and the need to reduce amperage, heat, and copper intensity. FLEX is among the best-positioned beneficiaries, with opportunities spanning power interconnects, power management, wide-bandgap semiconductors, and grid infrastructure. The AI power interconnect TAM could expand from roughly $2B today to over $4B by 2028, while power management and WBG-related opportunities grow into multi-billion-dollar markets. Power is becoming a critical bottleneck in AI infrastructure, creating a new investment cycle that extends well beyond GPUs and networking.

FLEX is leading the way higher after being added to the S&P 500.

MRVL +8% and FLEX +4% leading the way up early after being added to SP500. Memory names strong with MU +6.5% and SNDK +4%

The company's stock outperformed due to the $80 billion Google raise, which positively impacted the TPU supply chain.

Mizuho's Jordan Klein pitched the stock as a new favorite idea, suggesting its spinco is comparable to Vertiv and nVent but growing significantly faster (65-75% revenue growth guided for FY27).

Applying a discounted valuation multiple to the projected ~$20 billion FY28 revenue for SpinCo alone suggests it could be worth $60-80 billion.

Combined with RemainCo at ~$25 billion, Klein sees potential for the stock to double.

The stock is considered underowned because it has been forgotten.

The power business runs at mid-to-high teens operating margins, while the cloud/cooling business runs closer to mid-to-high single-digit operating margins.

The analyst's internal calculations suggest a price target in the $150s-$160s.

The company beat and raised guidance, and announced a spin-out of its Cloud and Power infrastructure business.

The spun-out business is expected to show significant growth, accelerating in future fiscal years.

The CEO has a strong reputation for successful transactions like this, having led a similar business at Eaton.

The company was upgraded to Outperform due to an improved entry point and increasing exposure to cloud and AI datacenter infrastructure, with a $75 price target.

The firm expects $6.5 billion in FY26 datacenter revenue, with approximately $2 billion from higher-margin power solutions that could more than double corporate average margins, potentially driving consolidated margins towards 7% over time.

There is potential for upside to estimates as hyperscale demand accelerates, with an upcoming investor meeting flagged as a catalyst to clarify cloud/AI contribution and support multiple expansion.