Flex’s (FLEX) CPI Business Positioned for an Exponential Leap

Soumya Eswaran Tue, August 4, 2026 at 8:12 AM EDT 3 min read **

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Third Point Management, a New York-based investment advisor, released its second-quarter 2026 investor letter. A copy is available to download here. Third Point's flagship Offshore Fund returned 7.7% in Q2 2026, outperforming the hedge fund index but trailing broader equity benchmarks. Second Quarter returns benefited from strong performance in semiconductors, memory, semiconductor equipment, power infrastructure, and aerospace sectors, with a 45% net exposure. Short book returned -5.1% net in the quarter, generating significant alpha against the S&P 500's 15.2% rally, driven by declines in telecoms and financials. A June sell-off in AI infrastructure stocks, affecting memory, semiconductors, hyperscalers, and supply chains, appeared unrelated to fundamentals, economic trends, or geopolitics, with many stocks falling despite strong earnings. Additionally, its credit portfolios delivered modest gains; however, structured credit remained resilient. The firm remains focused on a balanced, conservative portfolio to manage risk amid volatility, enabling it to capitalize on opportunities and minimizing exposure to sudden market shifts. In addition, please check the Fund's top five holdings to know the best picks in 2026.

In its Q2 2026 investor letter, Third Point Management highlighted its new portfolio addition, Flex Ltd. (NASDAQ:FLEX). Flex Ltd. (NASDAQ:FLEX) provides technology innovation, supply chain, and manufacturing solutions to data center, communications, enterprise, consumer, automotive, healthcare, industrial, and power industries. On August 3, 2026, Flex Ltd. (NASDAQ:FLEX) closed at $6.34 per share, reflecting a market capitalization of $341.62 million. Flex Ltd. (NASDAQ:FLEX) posted a one-month return of -19.41%, while its shares gained 48.05% over the past 52 weeks.

Third Point Management stated the following regarding Flex Ltd. (NASDAQ:FLEX) in its Q2 2026 investor letter:

"We established a new position in Flex Ltd. (NASDAQ:FLEX), a global manufacturing services company, following its announcement that it intends to separate its Cloud & Power Infrastructure ("CPI") business into an independent public company. We believe the market is underestimating the quality, growth profile, and strategic positioning of the business that will emerge from the separation.

We would describe CPI as much more than a contract manufacturer. It designs and manufactures electrical power systems, liquid cooling products, and integrated server racks that sit at the center of AI datacenter deployments. As hyperscalers build increasingly power-dense clusters, we expect customers will look to simplify procurement by sourcing integrated power, cooling, and rack solutions from a single supplier. As we see it, Flex occupies a unique position in the value chain. Traditional electrical equipment companies lack its rack integration capabilities, while server rack manufacturers generally do not offer proprietary power or liquid cooling products." (Click here to read the full text)

Story Continues Flex Ltd. (FLEX): Among Overlooked Tech Stocks to Buy Now Flex Ltd. (NASDAQ:FLEX) is not on our list of the 40 Most Popular Stocks Among Hedge Funds**. As per our database, 59 hedge fund portfolios held Flex Ltd. (NASDAQ:FLEX) at the end of the first quarter which was 62 in the previous quarter. While we acknowledge the potential of Flex Ltd. (NASDAQ:FLEX) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on thebest short-term AI stock.

In another article, we covered Flex Ltd. (NASDAQ:FLEX) and shared Artisan Small Cap Fund's insight on the company. In addition, please check out our hedge fund investor letters Q2 2026 page for more investor letters from hedge funds and other leading investors.