Flex Ltd. announced on May 5, 2026 [4], that it will spin off its Cloud and Power Infrastructure business into a separate publicly traded company.
This strategic move allows the manufacturer to isolate its artificial intelligence exposure. By creating a dedicated entity, the company aims to unlock higher-growth revenue opportunities specifically tied to the expanding needs of AI data-center infrastructure.
The new entity, referred to as "SpinCo," will focus exclusively on the cloud and power sectors. Flex CEO Revathi Advaithi said the announcement during an earnings call in New York. The company expects the spin-off process to be completed by early 2027 [1].
Financial projections for the new company indicate aggressive growth targets. Flex expects SpinCo to achieve revenue growth of 65% to 75% [2] in fiscal 2027. The company further anticipates that this growth will accelerate to more than 80% [3] in fiscal 2028.
The decision to separate these units reflects a broader industry trend of diversifying hardware manufacturing to better capture the valuation premiums associated with AI. By listing the unit as a separate company, Flex can provide investors with a direct way to bet on the physical infrastructure required to power large-scale AI models.
Flex remains a global contract manufacturer, but the separation of the power and cloud units marks a significant shift in its corporate structure. The company said the move is designed to monetize its current position in the AI market while maintaining its core manufacturing operations.
“Flex plans to spin off its Cloud and Power Infrastructure business into a separate publicly traded company.”
This restructuring indicates that the demand for AI physical infrastructure is decoupling from general contract manufacturing. By creating a pure-play AI infrastructure company, Flex is attempting to capture a higher market valuation that typically accompanies high-growth tech sectors, rather than the steadier, lower-multiple valuations of diversified manufacturing.
