We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Can Celestica Maintain Healthy Revenue Growth With an AI Focus?
Read MoreHide Full Article
Key Takeaways
Celestica leverages its AI-focused portfolio to drive healthy revenue growth.
New SC6100 and DS4100 products target high-performance enterprise workloads.
CLS stock has surged 409.7% in a year, far outpacing its industry's 141.6% growth.
Celestica Inc. (CLS - Free Report) boasts a diverse portfolio of products that are integral to AI (artificial intelligence) applications. With more than 25 years of experience in manufacturing backed by a simplified and optimized global network, it 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. This has helped the company record healthy revenue growth over the years.
The growing proliferation of AI-based applications and generative AI tools across industries presents a solid growth opportunity for Celestica. AI investments are driving demand for Celestica’s enterprise-level data communications and information processing infrastructure products, such as routers, switches, data center interconnects, edge solutions, and servers and storage-related products. To further capitalize on this trend, Celestica is steadily expanding its offering through innovation and strategic collaboration.
Powered by EPYC Embedded 9004 series processors from Advanced Micro Devices, Celestica SC6100 is a next-generation, 2U rackmount all-flash storage controller designed to deliver superior performance for the most demanding enterprise application workloads. The company has also introduced DS4100, a 1U 800G per port top-of-rack, leaf/spine switch to cater to the high-bandwidth demands of data center networking. The solution is designed with Broadcom’s TH4-12.8T switch chipset. The company expects solid demand for its 400G and 800G switch products, driven by the growing use of high-bandwidth, data-intensive AI applications.
Some Tech Firms Focusing on AI
Amazon.com, Inc.’s (AMZN - Free Report) expansion of its Bedrock platform has positioned it as a frontrunner in the enterprise AI race. Amazon Bedrock has emerged as a game-changing, fully managed service that offers enterprises seamless access to high-performing foundation models from leading AI companies. The platform's recent developments, including automated reasoning checks and multi-agent collaboration capabilities, address critical challenges in AI adoption while opening new revenue streams for Amazon's cloud division.
Microsoft Corporation (MSFT - Free Report) is striving to maintain its competitive edge in AI with the introduction of the Agent Store, which creates a new marketplace for AI-powered workplace assistants. The platform features more than 70 agents and provides developers with monetization opportunities through Microsoft 365 Copilot integration. The Azure AI Foundry application and agent development hub has been adopted by developers at more than 70,000 enterprises and digital-native companies. Microsoft's Azure AI Agent Service has been utilized by more than 10,000 organizations to build, deploy and scale agents.
CLS’ Price Performance, Valuation and Estimates
Celestica has surged 409.7% over the past year compared with the industry’s growth of 141.6%.
Image Source: Zacks Investment Research
From a valuation standpoint, CLS trades at a forward price-to-sales ratio of 2.23, above the industry tally of 0.91.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for CLS’ earnings for 2025 has been on the rise (up 9.5%) over the past 60 days.
Image: Bigstock
Can Celestica Maintain Healthy Revenue Growth With an AI Focus?
Key Takeaways
Celestica Inc. (CLS - Free Report) boasts a diverse portfolio of products that are integral to AI (artificial intelligence) applications. With more than 25 years of experience in manufacturing backed by a simplified and optimized global network, it 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. This has helped the company record healthy revenue growth over the years.
The growing proliferation of AI-based applications and generative AI tools across industries presents a solid growth opportunity for Celestica. AI investments are driving demand for Celestica’s enterprise-level data communications and information processing infrastructure products, such as routers, switches, data center interconnects, edge solutions, and servers and storage-related products. To further capitalize on this trend, Celestica is steadily expanding its offering through innovation and strategic collaboration.
Powered by EPYC Embedded 9004 series processors from Advanced Micro Devices, Celestica SC6100 is a next-generation, 2U rackmount all-flash storage controller designed to deliver superior performance for the most demanding enterprise application workloads. The company has also introduced DS4100, a 1U 800G per port top-of-rack, leaf/spine switch to cater to the high-bandwidth demands of data center networking. The solution is designed with Broadcom’s TH4-12.8T switch chipset. The company expects solid demand for its 400G and 800G switch products, driven by the growing use of high-bandwidth, data-intensive AI applications.
Some Tech Firms Focusing on AI
Amazon.com, Inc.’s (AMZN - Free Report) expansion of its Bedrock platform has positioned it as a frontrunner in the enterprise AI race. Amazon Bedrock has emerged as a game-changing, fully managed service that offers enterprises seamless access to high-performing foundation models from leading AI companies. The platform's recent developments, including automated reasoning checks and multi-agent collaboration capabilities, address critical challenges in AI adoption while opening new revenue streams for Amazon's cloud division.
Microsoft Corporation (MSFT - Free Report) is striving to maintain its competitive edge in AI with the introduction of the Agent Store, which creates a new marketplace for AI-powered workplace assistants. The platform features more than 70 agents and provides developers with monetization opportunities through Microsoft 365 Copilot integration. The Azure AI Foundry application and agent development hub has been adopted by developers at more than 70,000 enterprises and digital-native companies. Microsoft's Azure AI Agent Service has been utilized by more than 10,000 organizations to build, deploy and scale agents.
CLS’ Price Performance, Valuation and Estimates
Celestica has surged 409.7% over the past year compared with the industry’s growth of 141.6%.
Image Source: Zacks Investment Research
From a valuation standpoint, CLS trades at a forward price-to-sales ratio of 2.23, above the industry tally of 0.91.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for CLS’ earnings for 2025 has been on the rise (up 9.5%) over the past 60 days.
Image Source: Zacks Investment Research
Celestica sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.