Flex's Strategic Position in AI Infrastructure Power Innovation: Why Flex Is a Must-Hold Play in the AI Data Center Transition to 800 VDC Efficiency

The transition to 800VDC power systems in data centers is no longer a distant possibility—it is an inevitability driven by the insatiable demand for AI workloads. As AI models grow in complexity and scale, traditional power architectures are hitting physical and efficiency limits. Flex (NASDAQ: FLEX), a global leader in advanced manufacturing and power solutions, is not only adapting to this shift but actively shaping it. With a groundbreaking power shelf system tailored for NVIDIA's GB300 NVL72 platform and a strategic alignment with the 800VDC industry transition, Flex is positioning itself as a critical enabler of the AI revolution. For investors, this represents a compelling long-term opportunity in a market poised for exponential growth.

The 800VDC Revolution: A Paradigm Shift in Data Center Efficiency

The current 54VDC power distribution systems in data centers are increasingly inadequate for the megawatt-scale workloads of AI. Copper overload, space constraints, and inefficiencies from multiple AC/DC conversions have made these systems unsustainable. Enter 800VDC: a high-voltage, direct-current architecture that centralizes power conversion at the data center perimeter, eliminating intermediate steps and reducing losses. NVIDIA, the undisputed leader in AI silicon, is spearheading this transition with its Kyber rack-scale systems, set for release in 2027.

Flex's recent power shelf system for the NVIDIA GB300 NVL72 platform is a critical enabler of this shift. The system delivers 33 kW of power per shelf with a peak efficiency of 97.5% at half-load—60% lower conversion losses than conventional systems. This efficiency translates to reduced heat output, lower cooling costs, and a smaller physical footprint, all of which are vital for hyperscalers racing to meet AI demand. By aligning its production roadmap with NVIDIA's Kyber systems, Flex is ensuring it remains at the forefront of this transition.

Flex's Competitive Edge: Innovation, Partnerships, and Scalability

Flex's success in the 800VDC space hinges on three pillars: technological innovation, strategic partnerships, and scalable manufacturing.

1. Hybrid Supercapacitor Technology:
   Flex's collaboration with Musashi Energy Solutions has yielded Capacitive Energy Storage Systems (CESS) using hybrid supercapacitors (HSCs). These HSCs offer unparalleled power density, multi-million charge/discharge cycles, and safety certifications (UL 810A, UL 9540A). Unlike lithium-ion batteries, HSCs can rapidly absorb and release energy, making them ideal for managing the power surges inherent in AI training and inference. With CESS expected to enter commercial production in H1 2025, Flex is capturing a first-mover advantage in a market projected to grow at 19% CAGR, reaching $9.6 billion by 2032.

2. Industry-Wide Collaboration:
   Flex is a key partner in NVIDIA's 800VDC ecosystem, working alongside silicon giants (Infineon, STMicroelectronics), power systems providers (Delta, Eaton), and infrastructure leaders (Schneider Electric). This collaboration ensures Flex's solutions are not just compatible but optimized for the next-generation AI infrastructure. The company's vertically integrated approach—from rack assembly to liquid cooling—further differentiates it in a market where hyperscalers demand turnkey solutions.

3. Global Manufacturing and Margins:
   Flex's recent acquisition of a Polish manufacturing facility has doubled its European power product capacity, addressing regionalization trends and reducing lead times. This strategic expansion, combined with disciplined cost management, has driven a 100-basis-point improvement in operating margins in Q4 2025 (4.7% vs. 3.7% in 2024). With full-year revenue guidance raised to $26.5 billion and a 35% growth target for the data center segment, Flex is proving its ability to scale profitably.

Market Tailwinds: AI's Insatiable Appetite for Power

The 800VDC transition is not a niche trend—it is a foundational shift driven by the economics of AI. By 2027, data centers will require power densities exceeding 100 kW per rack, a level unattainable with legacy systems. The global 800VDC market is expected to grow at a double-digit CAGR, fueled by:
- Solid-State Transformers (SSTs): Projected to grow at 32% CAGR, SSTs are critical for converting 13.8 kV AC to 800VDC efficiently.
- Gallium Nitride (GaN) Semiconductors: Essential for high-efficiency DC-DC converters, the GaN market is set to grow at 49% CAGR.
- Energy Efficiency Mandates: Regulatory pressure to reduce PUE (Power Usage Effectiveness) will accelerate 800VDC adoption, as the architecture inherently reduces energy waste.

Flex's role in this ecosystem is multifaceted. It is not only manufacturing power components but also enabling the entire value chain—from silicon to cooling. This end-to-end capability is a significant advantage in an industry where integration is key.

Financials and Valuation: A Compelling Investment Case

Flex's Q4 2025 results underscore its momentum. Revenue of $6.4 billion, with data center segment growth outpacing the broader market, highlights its relevance to AI infrastructure. Adjusted EBITDA of $537 million and a 4.7% operating margin signal operational discipline. While tariffs and capacity investments may pressure margins in 2026, Flex's ability to pass through costs to customers and its strong cash flow position mitigate these risks.

From a valuation perspective, Flex trades at a premium to peers due to its high-growth data center segment, but the company's margins and guidance justify this. With a P/E ratio of ~14x (vs. the S&P 500's ~20x) and a forward P/E of 12x, Flex offers both growth and value. For investors seeking exposure to the AI infrastructure boom, Flex's diversified portfolio and leadership in 800VDC make it a must-hold.

Conclusion: A Cornerstone of the AI Era

Flex's strategic alignment with the 800VDC transition, coupled with its technological and manufacturing prowess, positions it as a cornerstone of the AI data center revolution. As AI workloads continue to outpace legacy infrastructure, Flex's solutions will be indispensable. For investors, the company's innovation, partnerships, and financial strength create a robust moat in a market with massive tailwinds. This is not just a play on AI—it's a bet on the future of computing itself.

Investment Recommendation: Buy Flex (FLEX) for long-term exposure to the 800VDC transition and AI infrastructure growth. Hold for at least 12–18 months to capture the full potential of the 2027 Kyber rollout and expanding market share.