Flex's Split Strategy Offers New Investment Options Amid AI Infrastructure Growth
Both Flex and Jabil are major players in the electronics manufacturing sector with significant exposure to artificial intelligence infrastructure. However, their strategies differ: Flex is planning a spin-off of its Cloud and Power Infrastructure business into a new entity called SpinCo by early 2027, while Jabil continues with an integrated model. This split allows investors to choose between high-growth AI-focused SpinCo or the more stable remaining Flex operations. Jabil expects $13.6 billion in AI-related revenue for fiscal 2026 and anticipates similar growth rates into FY 2027, supported by new customer wins. Meanwhile, SpinCo is projected to grow at a faster pace—between 65% and 75% in 2027—with acceleration expected beyond that due to contracts with hyperscalers like Google. Both companies have raised their guidance for the coming year, but Flex's strategy emphasizes strategic transformation through separation. Jabil focuses on leveraging its scale and diversified operations as a competitive advantage.
Topics: AI infrastructure company split electronics manufacturing growth strategies