Flex Ltd. (FLEX) Outgrew the Fund’s Small-Cap Mandate on AI Data Center Strength

Flex Ltd. (FLEX) Outgrew the Fund’s Small-Cap Mandate on AI Data Center Strength

Mon, July 27, 2026 at 4:06 PM GMT+3 3 min read

• FLEX -0.79%
• ^RUT -0.35%

Artisan Partners, an investment management company, released its second-quarter 2026 investor letter for its "Artisan Small Cap Fund". A copy of the letter can be downloaded here. The fund reported strong absolute returns and modestly outperformed the Russell 2000® Growth Index, which gained 25.7%. Global equities rebounded as resilient US growth, moderating inflation, strong earnings and continued AI investment outweighed delayed rate cuts, rising bond yields and geopolitical uncertainty. Investor Class: ARTSX, Advisor Class: APDSX, and Institutional Class: APHSX returned 26.02%, 26.05%, and 26.11%, respectively, in the second quarter, compared to a 25.71% return for the index. Market leadership favored loss-making, highly leveraged companies, creating a difficult environment for quality-focused active managers. Health care was the strongest relative contributor, while energy, materials, financials and real estate also helped. Technology, industrials and consumer discretionary detracted, partly because the fund did not own oversized index contributors. Software holdings also weakened despite strong fundamentals. The fund remains positive on small-cap opportunities, AI infrastructure and health care, but has reduced software exposure and is staying selective as valuations rise and competitive risks increase. In addition, please check the Fund's top five holdings to know its best picks in 2026.

In its second-quarter 2026 investor letter, Artisan Small Cap Fund highlighted Flex Ltd. (NASDAQ:FLEX). Flex Ltd. (NASDAQ:FLEX) provides technology innovation, supply chain, and manufacturing solutions to data center, communications, enterprise, consumer, automotive, healthcare, industrial, and power industries. On July 24, 2026, Flex Ltd. (NASDAQ:FLEX) closed at $127.00 per share. One-month return of Flex Ltd. (NASDAQ:FLEX) was -25.73% and its shares gained 134.72% over the past 52 weeks. Flex Ltd. (NASDAQ:FLEX) has a market capitalization of $43.42 billion with a 52-week trading range between $47.83 - $166.86.

Artisan Small Cap Fund stated the following regarding Flex Ltd. (NASDAQ:FLEX) in its Q2 2026 investor letter:

"Flex Ltd. (NASDAQ:FLEX) is a global manufacturing and supply chain solutions provider with exposure to high-margin AI and cloud data center infrastructure, particularly power and cooling systems. The company's market capitalization has increasingly moved beyond the mandate of our small-cap strategy, leading us to reallocate capital to more attractive opportunities within our investable universe."

Flex Ltd. (NASDAQ:FLEX) is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 59 hedge fund portfolios held Flex Ltd. (NASDAQ:FLEX) at the end of the first quarter which was 62 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 best battery technology stocks to buy for grid storage. In addition, please check out our hedge fund investor letters Q2 2026 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.