Flex Ltd. (FLEX) is Benefitting from a Strategic Shift Toward High-Value, Secular Growth Markets

Artisan Partners, an investment management company, released its “Artisan Small Cap Fund” second-quarter 2025 investor letter. A copy of the letter can be downloaded here. Global markets saw an incredible but volatile quarter in the second quarter, shifting from deep declines to strong gains. In the quarter, its Investor Class fund ARTSX returned 7.30%, Advisor Class fund APDSX posted a return of 7.33%, and Institutional Class fund APHSX returned 7.36%, compared to a return of 11.97% for the Russell 2000 Growth Index. In addition, you can check the fund’s top 5 holdings to find out its best picks for 2025.

In its second-quarter 2025 investor letter, the Artisan Small Cap Fund highlighted stocks such as Flex Ltd. (NASDAQ:FLEX). Flex Ltd. (NASDAQ:FLEX) is a technology company that provides innovation, supply chain, and manufacturing solutions to various industries. The one-month return of Flex Ltd. (NASDAQ:FLEX) was -1.16%, and its shares gained 50.05% of their value over the last 52 weeks. On August 21, 2025, Flex Ltd. (NASDAQ:FLEX) stock closed at $49.41 per share, with a market capitalization of $18.477 billion.

Artisan Small Cap Fund stated the following regarding Flex Ltd. (NASDAQ:FLEX) in its second quarter 2025 investor letter:

"Among our top Q2 contributors were Flex Ltd. (NASDAQ:FLEX), MACOM and iRhythm. Flex provides outsourced electronic manufacturing services to a diverse set of end markets. The company hired a new CEO in 2020, who has been driving a strategic pivot toward manufacturing high-growth, low-volume and high-value products in areas such as health care, industrial, automotive and cloud infrastructure. Today, these higher value items account for ~60% of revenues and continue to tick higher. We believe moving away from more cyclical consumer electronics markets toward secular growth areas, such as electric vehicles and medical devices, along with the nearshoring of supply chains, will lead to faster growth and higher margins. At the beginning of the quarter, there were concerns about a potential slowdown in the industrial economy and its implications for Flex’s profit cycle. However, when the company reported its Q4 2024 earnings, it became evident that overall demand remained strong. While some end markets showed signs of weakness, these were more than offset by strength in other areas. Additionally, Flex noted increased interest from both existing and new customers regarding available capacity, as businesses work to become nimble in an increasingly uncertain tariff environment."

Flex Ltd. (NASDAQ:FLEX) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 55 hedge fund portfolios held Flex Ltd. (NASDAQ:FLEX) at the end of the second quarter, which was 46 in the previous quarter. In the second quarter, Flex Ltd. (NASDAQ:FLEX) reported revenue of $6.6 billion, up 4% from prior year comparable 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 the best short-term AI stock.

In another article, we covered Flex Ltd. (NASDAQ:FLEX) and shared the list of best tech stocks under $50 to invest in. In addition, please check out our hedge fund investor letters Q2 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.