AI Beneficiary Flex Stock Declines After Q4 Print, What's Going On?
Portfolio Pulse from Anusuya Lahiri
Flex Ltd (NASDAQ:FLEX) saw its stock decline by about 9% after reporting a fiscal Q4 2024 net sales decline of 11.7% year-on-year to $6.17 billion, despite beating analyst estimates. The company also provided a weaker than expected outlook for fiscal Q1 2025 and fiscal year 2025. Flex is considered an AI beneficiary, expected to gain from investments by major tech companies and the next Apple product cycle. Its stock has gained 89% in the last 12 months, and exposure to Flex can be gained through ETFs like Vanguard Information Tech ETF (NYSE:VGT) and SPDR Portfolio Developed World Ex-US ETF (NYSE:SPDW).
May 01, 2024 | 3:04 pm
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NEGATIVE IMPACT
Flex Ltd reported a Q4 sales decline and provided a weaker outlook for fiscal 2025, causing a 9% stock price drop.
The decline in Flex's stock price is directly related to its Q4 earnings report and weaker future outlook, despite beating analyst estimates. The market's reaction reflects concerns over future growth and profitability.
CONFIDENCE 90
IMPORTANCE 90
RELEVANCE 100
NEGATIVE IMPACT
SPDR Portfolio Developed World Ex-US ETF, which includes Flex Ltd, could see an indirect impact from Flex's 9% stock decline.
SPDW, by holding Flex Ltd, may be indirectly affected by the stock's decline. The diversified nature of SPDW may help buffer the impact, but it highlights the interconnectedness of assets within ETFs.
CONFIDENCE 80
IMPORTANCE 60
RELEVANCE 50
NEGATIVE IMPACT
Vanguard Information Tech ETF offers exposure to Flex Ltd, which saw a significant stock price drop after its Q4 earnings report.
As an ETF that includes Flex Ltd, VGT may experience indirect impact due to Flex's significant stock price movement, although the diversified nature of ETFs may mitigate this effect.
CONFIDENCE 80
IMPORTANCE 60
RELEVANCE 50