Flex, a company known for its electronic manufacturing, is set to separate its Axiom division, which specializes in power and cooling systems for AI data centers, into an independent public company by the first quarter of 2027. This decision, led by CEO Revathi Advaithi, aims to capitalize on the increasing demand for AI infrastructure.
Axiom's revenue is projected to grow at least 80% in fiscal 2028, with potential operating margins rising from 10% to between 15% and 20%. The separation could allow Axiom to be recognized for its faster growth and higher margins, attracting more attention from technology-focused investors.
Currently, Flex shares have dropped over 35% from their peak, presenting a potential buying opportunity ahead of upcoming earnings reports and an Innovation Day. Analyst Paul Meeks believes that while there are risks associated with AI spending and Axiom's performance, the company's strategic positioning and leadership make it an attractive investment prospect