Flex to Spin Off AI Infrastructure Business
Shares Soar 30% In Early Trading as Investors Welcome Focused Data Center Play
Manufacturing specialist Flex is separating its fast-growing cloud and power infrastructure business into a new publicly traded company, the company said Tuesday. The move gives investors a dedicated vehicle for the AI data center buildout while letting the parent company sharpen its focus on diversified advanced manufacturing.
Shares of Flex (FLEX) soared 30% in NASDAQ trading early Wednesday following the announcement, gaining more than $30 a share.
The new entity, referred to as SpinCo, will be a standalone critical infrastructure company targeting the full power and thermal stack for AI data centers, from grid interconnection down to the chip. Current Flex CEO Revathi Advaithi will lead SpinCo, while company president Michael Hartung will take over as Flex CEO once the separation is complete.
The company’s board unanimously approved the plan on May 5, with the spinoff expected to close in the first quarter of 2027 in a transaction structured to be tax-free for shareholders.
A Focused Bet on AI Infrastructure Demand
Flex has built a significant position in the AI data center supply chain in recent years, but that business has different financial characteristics, growth rates, and investor appeal than the rest of the company’s portfolio.
As a standalone company, SpinCo will give investors a cleaner view of a high-growth infrastructure play tied directly to the AI buildout. Flex is targeting SpinCo to generate approximately 65 to 75% revenue growth in fiscal 2027, with an acceleration to 80 percent or more in fiscal 2028.
The remaining Flex, by contrast, is expected to deliver low-to-mid-single-digit growth, a profile better suited to manufacturing-focused investors.
“By creating two focused, independent companies, we are giving SpinCo the platform to build and scale the products and digital infrastructure that the world’s most demanding AI workloads depend on, and Flex the focus to deliver advanced manufacturing solutions at global scale for diversified industries,” Advaithi said.
From Circuit Boards to AI
The spinoff reflects a strategic pivot that has been building for years. Flex was founded in 1969 by Joe and Barbara-Ann McKenzie as Flextronics, making circuit boards in Silicon Valley. It grew into one of the world’s largest contract manufacturers, assembling products for major consumer electronics and industrial brands across more than 30 countries.
The company’s data center play began in earnest in 2017, when Flex acquired the Power Modules business from Ericsson, making its initial investment in power technology and expanding into the cloud and telecom data center markets.
A series of acquisitions followed. From 2021 to 2025, Flex acquired Anord Mardix, expert in critical power solutions; Crown Technical Systems, known for integrated power distribution and protection systems; and JetCool Technologies, maker of liquid cooling products. Those deals created a “grid-to-chip” portfolio spanning power distribution, thermal management, and integrated infrastructure systems.
FLEX shares have reflected the market’s appetite for the AI infrastructure angle. The stock is now up 91% over the past 12 months. In its most recent quarter, Flex reported revenue of $7.48 billion, up 16.9 percent year-over-year.
Flex has created a resource hub for stakeholders.