Flex Ltd. (FLEX) Benefited from the Excitement Over AI

Sound Shore Management, an investment management firm, has released its investor letter for the second quarter of 2025. A copy of the letter can be downloaded here. The fund’s Investor Class (SSHFX) and Institutional Class (SSHVX) delivered 3.06% and 3.10%, respectively, in the second quarter of 2025 compared to a 3.79% return for the Russell 1000 Value Index (Russell Value) and 10.94% return for the Standard & Poor 500 Index (S&P 500). Sound Shore’s 35-year annualized returns were 14.92% and 15.14% for SSHFX and SSHVX, respectively, as of June 30, 2025, and were ahead of the Russell Value at 12.76% and trailed the S&P 500 at 19.71%. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its second-quarter 2025 investor letter, Sound Shore Management 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 17.42%, and its shares gained 95.98% of their value over the last 52 weeks. On September 10, 2025, Flex Ltd. (NASDAQ:FLEX) stock closed at $58.05 per share, with a market capitalization of $21.708 billion.

Sound Shore Management stated the following regarding Flex Ltd. (NASDAQ:FLEX) in its second quarter 2025 investor letter:

"While the appetite for semiconductor chips is being fueled by excitement around the potential of artificial intelligence (AI) technology, it is clear that the world needs more data centers and electricity to power them (as we described in our fourth quarter 2024 letter). Outsource manufacturer and long-term holding Flex Ltd. (NASDAQ:FLEX) benefited as a supplier to data centers. The stock was our best performer for the last three months and year-to-date. "

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 fiscal first quarter of 2026, Flex Ltd. (NASDAQ:FLEX) reported revenue of $6.6 billion, up 4% from prior year's 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 Artisan Small Cap Fund's views on the company. 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.