Celestica Inc.·Technology

Back in Q4 2025, I strongly believe the market overreacted to Celestica Inc.'s $1 billion 2026 CapEx plan. Back then, CLS management raised its revenue and adjusted EPS guidance. Therefore, the CapEx increase is meant to fund capacity for visible AI-driven demand. The main CLS risk I see is not weaker AI demand. In fact, management guided for 50% growth in CCS, which made up 74% of FY25 revenue.

Celestica Inc. is positioned for sustained growth, driven by hyperscaler demand and major AI capex from key customers like Alphabet. The CCS segment and fast growing HPS business support higher structural margins driven by richer product mix. High customer concentration remains a key risk, with three large customers contributing most of Celestica's revenue.

CLS rides on AI data center boom and AMD tie-ups to fuel growth, but heavy reliance on AI spending and macro risks raise questions after a massive stock surge.

CLS is powering AI data centers with high-speed networking, storage and computing solutions for faster, scalable and reliable performance.

Celestica is rated 'Buy' ahead of its Q1 2026 earnings, with strong conviction in a beat-and-raise scenario. Management has guided for aggressive first-quarter revenue and earnings growth, supported by a massive expansion of the manufacturing footprint in both Texas and high-demand markets like Thailand. The company has secured critical design and manufacturing awards for 1.6T networking platforms, effectively reducing customer concentration risks while capturing significant next-generation infrastructure market share.

Celestica (CLS) closed the most recent trading day at $297.34, moving +1.72% from the previous trading session.
Celestica Inc. provides hardware platform and supply chain solutions in North America, Europe, and Asia. It operates through two segments, Advanced Technology Solutions, and Connectivity & Cloud Solutions. The company offers a range of product manufacturing and related supply chain services, including design and development, engineering, supply chain management, new product introduction, component sourcing, electronics manufacturing and assembly, testing, complex mechanical assembly, systems integration, precision machining, order fulfillment, logistics, asset management, product licensing, and after-market repair and return services. It also provides enterprise-level data communications and information processing infrastructure products, such as routers, switches, data center interconnects, edge solutions, servers, and storage-related products; capacitors, microprocessors, resistors, and memory modules; and power inverters, energy storage products, smart meters, and other electronic componentry products. The company serves aerospace and defense, industrial, energy, healthtech, capital equipment, original equipment manufacturers, cloud-based, and other service providers, including hyperscalers, and other companies in a range of industries. Celestica Inc. was incorporated in 1994 and is headquartered in Toronto, Canada.
Technology
Hardware, Equipment & Parts
21,914
1998-06-30
1.35