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Flex Announces 2027 Spin-Off of Cloud and Power Unit as It Shifts Focus to AI Infrastructure
Flex Ltd., the world’s third‑largest electronics manufacturing services provider, announced on May 5 2026 that it will separate its Cloud and Power Infrastructure segment into a new independent public company in the first quarter of 2027. The decision, approved unanimously by the board, is designed to unlock shareholder value and to position the firm as a specialist in the fast‑growing AI data‑center market.
Under the plan, Flex will split into two entities: SpinCo, which will own the Cloud and Power Infrastructure business, and RemainCo, which will retain Flex’s core contract‑manufacturing operations. Analysts project that SpinCo will achieve 65‑75 % revenue growth in fiscal 2027, while RemainCo will continue to run more than 75 manufacturing sites in 30 countries.
The move follows the launch of Flex’s AI‑infrastructure platform in October 2025, a modular solution that bundles power, cooling, compute, and services into pre‑engineered designs that can be deployed up to 30 % faster than conventional data‑center solutions. The platform addresses a broader industry trend, as companies pour capital into specialized facilities to meet the compute demands of generative AI and other machine‑learning workloads.
A 2026 industry report noted that global spending on AI data‑center infrastructure reached $650 billion. Power and cooling are cited as the main bottlenecks, and Flex’s modular approach is engineered to mitigate these constraints.
Flex’s addition to the S&P 500 in June 2026—alongside Marvell Technology—expands its shareholder base. Inclusion typically triggers passive fund flows as index‑tracking funds buy shares to match the new composition of the benchmark.
From a valuation standpoint, the combined enterprise trades at roughly 35 times projected FY27 earnings per share. The premium reflects expectations that SpinCo will command an AI‑infrastructure multiple, while RemainCo will continue to compound cash flow through its established manufacturing operations.
CEO Revathi Advaithi will take the helm of SpinCo after the spin‑off. The transaction is structured as a tax‑free corporate split, and the board has stated that the separation will allow each entity to pursue growth strategies more effectively.
Industry observers note that the spin‑off aligns with a broader pattern of technology firms restructuring to focus on high‑growth AI infrastructure segments. It also underscores the growing importance of power, cooling, and rack density in data‑center design—areas where Flex’s platform offers a competitive advantage.
The spin‑off is slated to close in the first quarter of 2027, pending customary regulatory approvals and shareholder consent. Until then, Flex will operate as a single public company, with the new entities expected to be listed separately.
Investors will monitor the FY27 earnings releases for both SpinCo and RemainCo to assess whether the projected growth rates materialize. The companies’ performance will also be measured against the broader AI infrastructure market, which is expected to expand as enterprises and cloud providers scale their AI capabilities.
In short, Flex’s decision to spin off its Cloud and Power Infrastructure unit marks a strategic shift from contract manufacturing toward a focused AI‑infrastructure business. The move is supported by the firm’s modular platform, its inclusion in the S&P 500, and the high valuation multiples that AI infrastructure companies are attracting. The outcome will become clear when the separate entities report their FY27 results and when the spin‑off completes in early 2027.
Under the plan, Flex will split into two entities: SpinCo, which will own the Cloud and Power Infrastructure business, and RemainCo, which will retain Flex’s core contract‑manufacturing operations. Analysts project that SpinCo will achieve 65‑75 % revenue growth in fiscal 2027, while RemainCo will continue to run more than 75 manufacturing sites in 30 countries.
The move follows the launch of Flex’s AI‑infrastructure platform in October 2025, a modular solution that bundles power, cooling, compute, and services into pre‑engineered designs that can be deployed up to 30 % faster than conventional data‑center solutions. The platform addresses a broader industry trend, as companies pour capital into specialized facilities to meet the compute demands of generative AI and other machine‑learning workloads.
A 2026 industry report noted that global spending on AI data‑center infrastructure reached $650 billion. Power and cooling are cited as the main bottlenecks, and Flex’s modular approach is engineered to mitigate these constraints.
Flex’s addition to the S&P 500 in June 2026—alongside Marvell Technology—expands its shareholder base. Inclusion typically triggers passive fund flows as index‑tracking funds buy shares to match the new composition of the benchmark.
From a valuation standpoint, the combined enterprise trades at roughly 35 times projected FY27 earnings per share. The premium reflects expectations that SpinCo will command an AI‑infrastructure multiple, while RemainCo will continue to compound cash flow through its established manufacturing operations.
CEO Revathi Advaithi will take the helm of SpinCo after the spin‑off. The transaction is structured as a tax‑free corporate split, and the board has stated that the separation will allow each entity to pursue growth strategies more effectively.
Industry observers note that the spin‑off aligns with a broader pattern of technology firms restructuring to focus on high‑growth AI infrastructure segments. It also underscores the growing importance of power, cooling, and rack density in data‑center design—areas where Flex’s platform offers a competitive advantage.
The spin‑off is slated to close in the first quarter of 2027, pending customary regulatory approvals and shareholder consent. Until then, Flex will operate as a single public company, with the new entities expected to be listed separately.
Investors will monitor the FY27 earnings releases for both SpinCo and RemainCo to assess whether the projected growth rates materialize. The companies’ performance will also be measured against the broader AI infrastructure market, which is expected to expand as enterprises and cloud providers scale their AI capabilities.
In short, Flex’s decision to spin off its Cloud and Power Infrastructure unit marks a strategic shift from contract manufacturing toward a focused AI‑infrastructure business. The move is supported by the firm’s modular platform, its inclusion in the S&P 500, and the high valuation multiples that AI infrastructure companies are attracting. The outcome will become clear when the separate entities report their FY27 results and when the spin‑off completes in early 2027.
