Flex (FLEX) is drawing attention after expanding its manufacturing partnership with Cerebras to scale production of the CS-3 AI accelerator at its Milpitas, California facilities.

The latest Cerebras partnership news comes as Flex shares trade at US$128.72. The stock is down 13.74% on a 1 month share price return but still shows a 102.14% share price return year to date and a very large 5 year total shareholder return, suggesting longer term momentum remains strong even as near term enthusiasm has cooled.

If you are watching how AI hardware manufacturing is reshaping opportunities beyond Flex, this is a good moment to scan 52 AI infrastructure stocks.

After a sharp run this year and a recent pullback, Flex now trades at a clear gap to both analyst targets and intrinsic value estimates. Is the market still overpaying for the AI story, or is it already underpricing it?

Most Popular Narrative: 19.8% Undervalued

On the most followed narrative, Flex screens as undervalued, with a fair value of $160.40 versus the current $128.72, putting the CS-3 deal into a broader AI infrastructure story.

The ongoing surge in demand for data center and AI infrastructure requiring integrated power, cooling, and advanced IT hardware positions Flex for sustained, outsized revenue growth, as evidenced by the 35% forecasted annual increase in its data center segment, supporting both topline expansion and higher portfolio margins.

Want to see what is baked into that AI growth story for Flex? The narrative leans on faster expansion, richer margins, and a tighter share count. The exact mix may surprise you.

Result: Fair Value of $160.40 (UNDERVALUED)

However, Flex still faces concentration risk with a small group of large data center customers, and thin margins leave limited room if costs rise or demand shifts.

Another View: Flex Through the P/E Lens

The DCF work points to Flex trading below an estimated fair value, but the P/E picture is less forgiving. At 53.6x earnings versus 30.8x for the US Electronic industry and 44.2x for peers, the stock screens expensive, even if the 66x fair ratio suggests room for rerating. Which signal should be treated as more important?

Before leaning on that earnings multiple, it is worth seeing how it fits into a fuller breakdown of the numbers and assumptions in play, See what the numbers say about this price — find out in our valuation breakdown.

Next Steps

With both excitement around Flex's AI exposure and concern about concentration and valuation, it pays to review the data firsthand and move quickly to form your own view using 3 key rewards and 2 important warning signs

Looking For More Investment Ideas Beyond Flex?

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.