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Celestica Stock Rises 262.3% in the Past Year: How to Play the Stock
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Key Takeaways
Celestica stock has surged 262.3% in a year, outperforming peers and broader markets.
CLS is benefiting from strong AI data center demand and collaborations with AMD and Broadcom.
The company is navigating growth opportunities alongside ongoing market and operational challenges.
Celestica, Inc. (CLS - Free Report) shares have skyrocketed 262.3% in the past year compared with the Electronics - Manufacturing Services industry’s growth of 133.3%. The stock has outperformed the Zacks Computer & Technology sector and the S&P 500 during the same time frame.
Image Source: Zacks Investment Research
The company has outperformed its peers like Jabil, Inc. (JBL - Free Report) and Flex Ltd. (FLEX - Free Report) . Shares of Jabil have jumped 98.5%, and shares of Flex have risen 116.1%.
CLS Rides on Strength in AI Data Center, Strategic Collaborations
Celestica is benefiting from solid momentum in the AI data center market backed by its robust portfolio offering. Businesses across sectors, such as healthcare, financial services, utilities, ecommerce and consumer electronics, are accelerating their digital transformation and AI integrations initiatives to optimize operations. The businesses are generating vast amounts of information related to user interactions and product development every moment through their digitized operations. To gain a competitive advantage in the fast-paced industry, the company needs to analyze this data in real time, which helps enterprises make better decisions.
This is driving demand for high performance computing, pushing hyperscalers to expand their AI data center footprint. This has created a solid growth opportunity for the company. The AI data center has become Celestica’s largest and fastest-growing market in 2025.
Moreover, the company is expanding its collaboration with industry leaders to drive innovation. It is one of the first companies to develop a prototype 1.6T liquid-cooled switch using Broadcom Tomahawk 6 silicon. The company recently formed a strategic collaboration with Advanced Micro Devices (AMD) to facilitate the development of a leading-edge Helios rack-scale artificial intelligence (AI) platform. The collaboration aims to blend AMD’s capabilities in high performance computing with Celestica’s engineering and manufacturing knowhow to expedite large scale AI deployments. Celestica has also developed a next-generation, 2U rackmount all-flash storage controller, SC6100, powered by AMD EPYC Embedded 9004 series processors. The solution is designed for the most demanding enterprise application workloads. Such growing prowess in the AI data center market is driving Celestica’s top line.
Backed by strong demand visibility, Celestica has raised its revenue guidance for 2026. It expects $17 billion in revenues in 2026, implying 37% year-over-year growth. To support the growing demand, the company is expanding its capacity in its Texas, Thailand, Mexico and Taiwan facilities. The company also places strong emphasis on efficient operational execution. It is improving its margin through enhancing productivity and achieving economies of scale.
Major Challenges
The company’s growth trajectory is heavily reliant on AI-related spending at least in the near term. It is highly exposed to hyperscaler capex cycle. The growing geopolitical unrest, surging energy prices and global macro uncertainties can push businesses to constrain their AI-related spending. It has already been investing in capacity expansion. However, a slowdown in the AI data center market will not only impact profit, but it will also limit cash flow generation.
It also generates lions shares of its revenues from outside North America. This exposes the company to foreign exchange fluctuations. Celestica relies on China for a part of its manufacturing, design, support and storage operations. China’s strained bilateral trade relationship with the United States remains a major concern for the company.
The company is experiencing weakness in the ATS segment. Elevated inventory levels in the Industrial end markets are primarily hindering net sales growth in this segment. Although demand has stabilized, macroeconomic challenges remain headwinds.
The company faces stiff competition from Jabil, Flex and Sanmina in the EMS industry. Jabil and Flex are also rapidly expanding their portfolio to gain a strong foothold in the AI infrastructure space.
Estimate Revision Trend
Earnings estimates for Celestica for 2026 and 2027 have remained unchanged over the past 60 days.
Image Source: Zacks Investment Research
Key Valuation Metric of CLS
From a valuation standpoint, CLS is currently trading at a premium compared to the industry. Going by the price/earnings ratio, the company’s shares currently trade at 30.21 forward 12-month earnings, higher than 22.25 for the industry.
Image Source: Zacks Investment Research
End Note
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. Strategic collaboration with industry leaders such as Broadcom and AMD is driving innovation. The focus on improving productivity to boost profitability is a positive.
However, high reliance on the enterprise’s AI-related spending for top-line growth is a concern. Growing geopolitical volatility and macro headwinds can impact growth prospects in the near term. With a Zacks Rank #3 (Hold), CLS appears to be treading in the middle of the road, and new investors could be better off if they trade with caution. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Celestica Stock Rises 262.3% in the Past Year: How to Play the Stock
Key Takeaways
Celestica, Inc. (CLS - Free Report) shares have skyrocketed 262.3% in the past year compared with the Electronics - Manufacturing Services industry’s growth of 133.3%. The stock has outperformed the Zacks Computer & Technology sector and the S&P 500 during the same time frame.
Image Source: Zacks Investment Research
The company has outperformed its peers like Jabil, Inc. (JBL - Free Report) and Flex Ltd. (FLEX - Free Report) . Shares of Jabil have jumped 98.5%, and shares of Flex have risen 116.1%.
CLS Rides on Strength in AI Data Center, Strategic Collaborations
Celestica is benefiting from solid momentum in the AI data center market backed by its robust portfolio offering. Businesses across sectors, such as healthcare, financial services, utilities, ecommerce and consumer electronics, are accelerating their digital transformation and AI integrations initiatives to optimize operations. The businesses are generating vast amounts of information related to user interactions and product development every moment through their digitized operations. To gain a competitive advantage in the fast-paced industry, the company needs to analyze this data in real time, which helps enterprises make better decisions.
This is driving demand for high performance computing, pushing hyperscalers to expand their AI data center footprint. This has created a solid growth opportunity for the company. The AI data center has become Celestica’s largest and fastest-growing market in 2025.
Moreover, the company is expanding its collaboration with industry leaders to drive innovation. It is one of the first companies to develop a prototype 1.6T liquid-cooled switch using Broadcom Tomahawk 6 silicon. The company recently formed a strategic collaboration with Advanced Micro Devices (AMD) to facilitate the development of a leading-edge Helios rack-scale artificial intelligence (AI) platform. The collaboration aims to blend AMD’s capabilities in high performance computing with Celestica’s engineering and manufacturing knowhow to expedite large scale AI deployments. Celestica has also developed a next-generation, 2U rackmount all-flash storage controller, SC6100, powered by AMD EPYC Embedded 9004 series processors. The solution is designed for the most demanding enterprise application workloads. Such growing prowess in the AI data center market is driving Celestica’s top line.
Backed by strong demand visibility, Celestica has raised its revenue guidance for 2026. It expects $17 billion in revenues in 2026, implying 37% year-over-year growth. To support the growing demand, the company is expanding its capacity in its Texas, Thailand, Mexico and Taiwan facilities. The company also places strong emphasis on efficient operational execution. It is improving its margin through enhancing productivity and achieving economies of scale.
Major Challenges
The company’s growth trajectory is heavily reliant on AI-related spending at least in the near term. It is highly exposed to hyperscaler capex cycle. The growing geopolitical unrest, surging energy prices and global macro uncertainties can push businesses to constrain their AI-related spending. It has already been investing in capacity expansion. However, a slowdown in the AI data center market will not only impact profit, but it will also limit cash flow generation.
It also generates lions shares of its revenues from outside North America. This exposes the company to foreign exchange fluctuations. Celestica relies on China for a part of its manufacturing, design, support and storage operations. China’s strained bilateral trade relationship with the United States remains a major concern for the company.
The company is experiencing weakness in the ATS segment. Elevated inventory levels in the Industrial end markets are primarily hindering net sales growth in this segment. Although demand has stabilized, macroeconomic challenges remain headwinds.
The company faces stiff competition from Jabil, Flex and Sanmina in the EMS industry. Jabil and Flex are also rapidly expanding their portfolio to gain a strong foothold in the AI infrastructure space.
Estimate Revision Trend
Earnings estimates for Celestica for 2026 and 2027 have remained unchanged over the past 60 days.
Image Source: Zacks Investment Research
Key Valuation Metric of CLS
From a valuation standpoint, CLS is currently trading at a premium compared to the industry. Going by the price/earnings ratio, the company’s shares currently trade at 30.21 forward 12-month earnings, higher than 22.25 for the industry.
Image Source: Zacks Investment Research
End Note
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. Strategic collaboration with industry leaders such as Broadcom and AMD is driving innovation. The focus on improving productivity to boost profitability is a positive.
However, high reliance on the enterprise’s AI-related spending for top-line growth is a concern. Growing geopolitical volatility and macro headwinds can impact growth prospects in the near term. With a Zacks Rank #3 (Hold), CLS appears to be treading in the middle of the road, and new investors could be better off if they trade with caution. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.