Can Flex (FLEX) Pull Off Its Plan for Its Fastest-Growing Unit? Farooq Fri, November 13, 2026 at 4:33 PM EST 4 min read FLEX -3.61% ^VIX +3.21% ^IXIC -0.91% Trade Flex on Coinbase Trading disclosure Trading disclosure The above button links to Coinbase. Yahoo Finance is not a broker-dealer or investment adviser and does not offer securities or cryptocurrencies for sale or facilitate trading. Coinbase pays us for certain activity generated through this link. Prices displayed are informational.
We just published a list of the 10 Multibagger Stocks to Buy According to Wall Street and Flex (NASDAQ:FLEX) ranked 8th on this list.
Wall Street's AI trade just had one of its worst weeks in years. Politics and inflation hit it at the same time. The Nasdaq Composite posted its deepest one-day drop since April 2025 last week, after Democrats swept the midterm elections and investors began weighing tougher scrutiny of AI and limits on data center construction. The Cboe Volatility Index climbed to a seven-month high the same day.
Stocks first cheered the election. They closed sharply higher the day after the vote because the result cleared up political uncertainty. Then chipmakers and data center operators fell, even as the biggest, cash-rich AI spenders rose. A slower buildout eases cash demands on the companies doing the spending, but it squeezes the operators and suppliers whose growth depends on fast construction.
Scott Chronert, head of US equity strategy at Citi Research, said a change in the pace of the data center buildout changes the basic path for many of those suppliers. Our list of oversold AI stocks where Wall Street analysts see 50% upside or more covers more of the group.
Inflation added a second worry. The Labor Department said consumer prices rose 0.4% in October, a third straight gain of 0.4% or more. Economists polled by Reuters had expected 0.3%. Markets now fully price in a Federal Reserve rate increase of at least 25 basis points in December, up from 84% a day earlier, according to CME FedWatch.
Fed Governor Christopher Waller said the central bank should raise rates in December even if inflation had cooled. He said a half-point move should be considered if the picture worsened. Jason Ware, chief investment officer at Albion Financial Group, said investors began to wonder whether the Fed worried more about inflation than they did, and sold some stocks.
The rout wiped out trillions of dollars in market value and clouded the outlook for a global economy the AI boom has been supporting. Readers following the chip side of the trade can find more names in our list of the best semiconductor stocks to buy for the next decade. Ahead of the Fed's December meeting, traders expect about two more quarter-point increases in total this cycle, according to LSEG data.
Flex made it to our list because it has an average upside potential of 91%. Goldman Sachs analyst Mark Delaney lifted his price target on Flex to $159 from $145 on October 29 and kept a Buy rating, a day after the company raised its full-year outlook.
Flex builds electronics for other companies, and its fastest-growing unit now makes power and cooling equipment for AI data centers. That unit grew 54% in the fiscal second quarter, and management expects full-year adjusted earnings per share to rise 52% at the midpoint. Chief Executive Officer Revathi Advaithi plans to spin the unit off as a separate company called Axiom.
Shareholders approved the Axiom spin-off earlier this month, by an overwhelming margin. Flex expects to complete the separation in the first quarter of 2027.
Debt comes with it. Flex borrowed $4.4 billion to buy EPC Power, a maker of power conversion equipment, and Axiom agreed to sell $2 billion of convertible preferred stock to repay part of that. Advaithi says EPC adds products for the 800-volt power designs data centers are moving toward.
While we acknowledge the risk and potential of FLEX as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
READ NEXT: SanDisk (SNDK) Is Now Worth More Than the Company That Spun It Off and Micron (MU) vs. Sandisk (SNDK): Is the Smaller Factory Bill Really an Advantage?
Disclosure: None. Follow Insider Monkey on Google News.
