This Manufacturing Stock Made Josh Brown's List as It Gets Ready for a Big Move Higher

Why It Matters

Flex’s deepening role in AI‑driven data‑center supply chains positions it as a critical growth engine, offering investors exposure to high‑margin, multiyear contracts in a sector poised for $700 billion of annual capex.

Key Takeaways

• Flex's data‑center segment grew 50% YoY, driving margin expansion.
• Flex Reliability Solutions focus yields higher‑margin, multiyear contracts.
• EPS up 51% annually; share buybacks cut shares 27% in 8 years.
• Stock trades near $73 breakout; 50‑day support at $64, 200‑day $59.
• Guidance: 9% revenue growth, 20% earnings growth expected next quarter.

Pulse Analysis

Flex Ltd.’s evolution from a contract assembler of PCs to a strategic partner in high‑tech manufacturing reflects a broader industry shift toward integrated design‑build services. By embedding itself in the supply chains of giants like Apple, Tesla and hyperscale cloud providers, Flex captures more value from the AI and data‑center boom. Its Flex Reliability Solutions unit, which handles long‑cycle, high‑margin projects, differentiates the company from traditional low‑margin assemblers and aligns with the $700 billion annual AI capex forecast, making it a pivotal enabler of next‑generation hardware.

Financially, Flex has turned a modest 5.5% gross margin in 2020 into 8.4% in 2025, driven largely by the 50% YoY surge in its data‑center segment. Consistent EPS acceleration of 51% per year and a 27% reduction in share count via buybacks underscore disciplined capital allocation. The stock’s technical profile shows a breakout near $73, with the 50‑day moving average at $64 and the 200‑day at $59 acting as strong support. Momentum indicators such as a 62 RSI suggest the rally remains intact, while the gap‑fill zone around $66‑$68 offers a potential catalyst for further upside.

Looking ahead, Flex’s guidance of 9% revenue and 20% earnings growth signals continued momentum as cloud and AI infrastructure spending accelerates. Investors should weigh the upside of its high‑margin reliability contracts against typical contract‑manufacturer risks, including client concentration and cyclical demand. Nonetheless, Flex’s unique positioning at the intersection of hardware design and large‑scale manufacturing makes it a compelling play for those seeking exposure to the infrastructure backbone of the AI era.