Flex Ltd (FLEX) Rose on Surging Data Center End-Markets

Sound Shore Management, an investment management firm, has released its investor letter for the fourth quarter of 2025. You can download a copy of the report here. In Q4 2025, The Sound Shore Fund Investor Class (SSHFX) and Institutional Class (SSHVX) advanced 7.83% and 7.87%, respectively, compared to the S&P 500’s 2.66% return and the Russell 1000 Value Index’s 3.81%. In 2025, the SSHFX and SSHVX returned 18.20% and 18.42%, respectively, ahead of the S&P 500’s 17.88% return and Russell Value’s return of 15.91%. Despite initial worries about policy changes, inflation, and economic growth, investors’ confidence improved in the second half of the year, and equities rose through year-end. Healthcare was the leading performer in the fourth quarter. The Fund’s performance was driven by a diverse group of companies across sectors in an AI and technology-dominated market. The firm focuses on identifying opportunities in industry shifts, management transitions, and undervalued assets. Please review the Strategy’s top five holdings to gain insights into their key selections for 2025.

In its fourth-quarter 2025 investor letter, Sound Shore Management highlighted Flex Ltd. (NASDAQ:FLEX) as one of its leading contributors. Flex Ltd. (NASDAQ:FLEX) provides technology innovation, supply chain, and manufacturing solutions to data center, communications, enterprise, and power industries. On February 13, 2026, Flex Ltd. (NASDAQ:FLEX) stock closed at $64.24 per share. One-month return of Flex Ltd. (NASDAQ:FLEX) was -0.91%, and its shares are up 51.12% over the past twelve months. Flex Ltd. (NASDAQ:FLEX)has a market capitalization of $3.101 billion.

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

"Some of our best contributors for 2025 included leading electronics and industrial assembler Flex Ltd. (NASDAQ:FLEX), global media company Warner Bros. Discovery and the aforementioned Citigroup. Importantly, each was purchased for very attractive valuations, relative to our estimates of earnings power, while having their own drivers of value leading to improved earnings. Accelerating data center end-markets helped FLEX rise.

Having recapped many of last year’s portfolio drivers, our annual letter is often a good opportunity to reflect over a longer period of time in order to put the recent past into perspective. Not because we like to drive looking in the rear-view mirror, but because it helps to know where we are in order to better prepare for the never-ending question all investors ask themselves: What comes next? The last few years have been characterized by a strong market led by a select few “Magnificent” companies that now dominate the popular indices and increasingly, even the portfolios of some of our “value” competitors. However, as we look back over the last decade or more, we’ve had stocks that we purchased at very attractive valuations, that have delivered tremendous growth over time. Sometimes referred to as “Multi-Baggers,” these are companies that we have owned successfully over the years and have been critical contributors to our returns. Names such as FLEX. This contract manufacturing services company has evolved from low-value, electronics assembly to high-value, specialized manufacturing for industries like medical, industrial, and automotive. FLEX CEO Revathi Advaithi instilled operational discipline and focused on core differentiation, leading to double-digit earnings growth and expanding margins. Our most recent ownership period began in 2020, when we were able to invest in FLEX at less than 8 times depressed earnings as many investors were focused on the past instead of looking at the possibilities ahead."

Flex Ltd. (NASDAQ:FLEX)is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 60 hedge fund portfolios held Flex Ltd. (NASDAQ:FLEX) at the end of the third quarter, up from 55 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 the best short-term AI stock.

In another article, we covered Flex Ltd. (NASDAQ:FLEX) and shared a list of high-flying tech stocks to buy. In addition, please check out our hedge fund investor letters Q4 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.