Shares of Flex Ltd. jumped 10.1% to $84.74 on October 27 as investors rushed to position ahead of the contract manufacturer's fiscal Q2 2027 earnings report, due before the open on October 28. The rally was ignited by a BofA Securities note reiterating its Buy rating while cutting its price target to $150 from $180, with the bank arguing that a selloff that left the stock roughly 54% below its 52-week high of $166.86 was overdone.

A blowout quarter from peer Celestica — whose shares surged on an 83% revenue jump driven by AI infrastructure demand — added fuel.

  • A Lower Target Still Points Way Up — If You Buy the Math. BofA's new $150 target implies a 17-times earnings ratio on a combined pro-forma earnings estimate of $8.70 per share — meaning the bank expects Flex to nearly triple its current trailing earnings power once its planned business split is complete. The cut from 19-times to 17-times earnings reflects higher debt and preferred shares tied to a recent $1.1 billion acquisition of a power-equipment maker. Even at $150, the target sits 77% above today's price, a gap wide enough to attract momentum buyers but also a signal of how much execution risk is priced in.

  • The Spinoff Is the Whole Bet. Flex plans to spin off its Cloud and Power Infrastructure business into a separate company called Axiom Solutions International, expected to trade on Nasdaq under AXM.

That unit grew revenues 35% year-over-year to $2.2 billion last quarter, and management expects 65%–75% full-year growth.

A $2 billion preferred-share deal already valued Axiom at $37.5 billion — more than Flex's entire current market cap of roughly $30 billion. If that valuation holds, shareholders are getting the remaining manufacturing business essentially for free.

  • Tomorrow's Report Is a Stress Test. Analysts expect earnings of about $1.06 per share , up from $0.79 a year ago.

Wall Street is also looking for roughly 19.8% revenue growth.

The company guided Q2 revenue of $7.95B–$8.25B and adjusted EPS of $1.00–$1.07. A miss would be especially damaging given the stock's violent recent swings — shares fell from $87.49 to $76.55 in just three trading days before today's snap-back.

  • Celestica's Blowout Sets a High Bar. Celestica posted adjusted EPS of $3.30 versus $2.99 expected, on revenue up 83% to $5.83 billion. That peer strength validates AI-infrastructure demand, but it also raises the stakes: investors buying Flex today are betting it can show comparable momentum in its own cloud and power unit, which is the engine behind the entire spinoff thesis.