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Celestica (CLS) Surges 191% in a Year: Reason to Buy the Stock?
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Celestica Inc. (CLS - Free Report) has gained a phenomenal 191.4% over the past year compared with the industry’s growth of 30.7%. It has also outperformed peers like Flex Ltd. (FLEX - Free Report) and Jabil Inc. (JBL - Free Report) over this period.
With more than 25 years of experience in manufacturing backed by a simplified and optimized global network, Celestica is committed to delivering next-generation, cloud-optimized data storage and industry-leading networking solutions to help customers balance performance, power efficiency and space as technologies evolve. It boasts a diverse portfolio of products that are integral to AI (artificial intelligence) applications.
One-Year Price Performance
Image Source: Zacks Investment Research
CLS Rides on Portfolio Strength
Celestia has benefited from the ongoing generative AI boom, thanks to the solid demand trends for AI/ML (machine learning) compute and networking products from hyperscale customers. In addition to the high-performance 800G family of network switches (which are vital for data centers that power AI applications) and storage solutions like the SC6100 controller and SD6200 platform (which provide efficient and scalable data storage for AI), Celestia offers Photonic Fabric – an optical compute and memory fabric solution capable of supercharging AI infrastructure. This transformational solution provides a foundational technology to advance AI while maintaining scalable, sustainable and profitable business models.
By integrating next-generation networking products with silicon photonics packaging solutions, Celestica aims to optimize supply chain solutions to reduce time to market. The data center switches combined with optical transceivers have the potential to handle and sustain high volumes of both inbound and outbound network traffic and cater to the demand for data center bandwidth for supporting AI/ML and data analytics applications.
Celestica recently launched DS4100 – a 1U 800G per port top-of-rack, leaf/spine switch – to cater to the high-bandwidth demands of data center networking across the enterprise, service provider and cloud provider domains. Designed with Broadcom Inc. (AVGO - Free Report) TH4-12.8T switch chipset, the latest addition to the Hardware Platform Solutions portfolio will help Celestica offer a comprehensive 800G data center switch lineup for demanding applications with the redundancy and flexibility required of modern data centers. Such state-of-the-art portfolio additions have helped the company to record healthy top-line growth over the past few years.
Image Source: Zacks Investment Research
CLS Expands Production Capabilities
With the proliferation of AI-based applications and generative AI tools, business enterprises are being increasingly forced to scale future computing platforms to address the burgeoning AI workloads with low-power, high-bandwidth data transfer. This, in turn, is leading to an exponential growth in I/O bandwidth.
To strengthen its market-leading position of AI-enabled products, Celestia is currently developing more than 100,000 square feet of additional capacity in Thailand. Moreover, it is adding 80,000 square feet of incremental capacity in Malaysia to augment its production capabilities. Celestia is also working with industry leaders to commercialize technologies such as On-Board Optics and Co-Packaged Optics to address the demand for speed and cost-efficiency amid the evolving technology landscape.
Estimate Revision Trend
Earnings estimates for Celestia for 2024 have moved up 40.5% to $3.85 over the past year, while the same for 2025 has improved 32.6% to $4.43. The positive estimate revision depicts optimism about the stock’s growth potential.
Image Source: Zacks Investment Research
End Note
As the company scales up production volumes and costs go down, possible uses for silicon photonics are likely to soar across several industries, including automotive, data center and high-performance computing, telecommunications, medical, aerospace and defense.
Riding on a robust earnings surprise history and favorable Zacks Rank, it appears primed for further stock price appreciation. Consequently, investors are likely to profit if they bet on this high-flying stock now.
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Celestica (CLS) Surges 191% in a Year: Reason to Buy the Stock?
Celestica Inc. (CLS - Free Report) has gained a phenomenal 191.4% over the past year compared with the industry’s growth of 30.7%. It has also outperformed peers like Flex Ltd. (FLEX - Free Report) and Jabil Inc. (JBL - Free Report) over this period.
With more than 25 years of experience in manufacturing backed by a simplified and optimized global network, Celestica is committed to delivering next-generation, cloud-optimized data storage and industry-leading networking solutions to help customers balance performance, power efficiency and space as technologies evolve. It boasts a diverse portfolio of products that are integral to AI (artificial intelligence) applications.
One-Year Price Performance
Image Source: Zacks Investment Research
CLS Rides on Portfolio Strength
Celestia has benefited from the ongoing generative AI boom, thanks to the solid demand trends for AI/ML (machine learning) compute and networking products from hyperscale customers. In addition to the high-performance 800G family of network switches (which are vital for data centers that power AI applications) and storage solutions like the SC6100 controller and SD6200 platform (which provide efficient and scalable data storage for AI), Celestia offers Photonic Fabric – an optical compute and memory fabric solution capable of supercharging AI infrastructure. This transformational solution provides a foundational technology to advance AI while maintaining scalable, sustainable and profitable business models.
By integrating next-generation networking products with silicon photonics packaging solutions, Celestica aims to optimize supply chain solutions to reduce time to market. The data center switches combined with optical transceivers have the potential to handle and sustain high volumes of both inbound and outbound network traffic and cater to the demand for data center bandwidth for supporting AI/ML and data analytics applications.
Celestica recently launched DS4100 – a 1U 800G per port top-of-rack, leaf/spine switch – to cater to the high-bandwidth demands of data center networking across the enterprise, service provider and cloud provider domains. Designed with Broadcom Inc. (AVGO - Free Report) TH4-12.8T switch chipset, the latest addition to the Hardware Platform Solutions portfolio will help Celestica offer a comprehensive 800G data center switch lineup for demanding applications with the redundancy and flexibility required of modern data centers. Such state-of-the-art portfolio additions have helped the company to record healthy top-line growth over the past few years.
Image Source: Zacks Investment Research
CLS Expands Production Capabilities
With the proliferation of AI-based applications and generative AI tools, business enterprises are being increasingly forced to scale future computing platforms to address the burgeoning AI workloads with low-power, high-bandwidth data transfer. This, in turn, is leading to an exponential growth in I/O bandwidth.
To strengthen its market-leading position of AI-enabled products, Celestia is currently developing more than 100,000 square feet of additional capacity in Thailand. Moreover, it is adding 80,000 square feet of incremental capacity in Malaysia to augment its production capabilities. Celestia is also working with industry leaders to commercialize technologies such as On-Board Optics and Co-Packaged Optics to address the demand for speed and cost-efficiency amid the evolving technology landscape.
Estimate Revision Trend
Earnings estimates for Celestia for 2024 have moved up 40.5% to $3.85 over the past year, while the same for 2025 has improved 32.6% to $4.43. The positive estimate revision depicts optimism about the stock’s growth potential.
Image Source: Zacks Investment Research
End Note
As the company scales up production volumes and costs go down, possible uses for silicon photonics are likely to soar across several industries, including automotive, data center and high-performance computing, telecommunications, medical, aerospace and defense.
The stock delivered a trailing four-quarter average earnings surprise of 13.2%. It has a VGM Score of A. Celestia currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Riding on a robust earnings surprise history and favorable Zacks Rank, it appears primed for further stock price appreciation. Consequently, investors are likely to profit if they bet on this high-flying stock now.