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VZ vs. CLS: Which Tech Infrastructure Stock Is a Better Buy Now?
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Key Takeaways
Celestica expanded into AI infrastructure and reported 76% YoY growth in Connectivity & Cloud Solutions.
CLS raised its 2026 revenue outlook to $19B and increased adjusted EPS guidance to $10.15.
Verizon added 55,000 postpaid phone users and 341,000 broadband subscribers in Q1 2026.
The rapid expansion of AI, cloud computing and data-intensive applications is creating massive demand for next-generation digital infrastructure. While traditional telecom giants are upgrading networks to support AI-driven connectivity, hardware and data center suppliers are benefiting from hyperscaler spending on AI infrastructure. Amid this backdrop, let's evaluate which of the two established telecom leaders, Verizon Communications, Inc. (VZ - Free Report) or Celestica, Inc. (CLS - Free Report) , offers the better investment opportunity now.
Headquartered in Ontario, Canada, Celestica is one of the largest electronics manufacturing services companies in the world, primarily serving original equipment manufacturers, cloud-based and other service providers and enterprises from several industries. Verizon is one of the leading providers of local phone service, long-distance calls, wireless and data services.
Let us delve a little deeper into the companies’ competitive dynamics to understand which of the two is relatively better placed in this broader sector.
The Case for Celestica
Celestica has steadily expanded beyond traditional electronics manufacturing into emerging domains such as AI infrastructure manufacturing, high-speed networking systems, advanced platform solutions, liquid-cooled AI systems and optical networking. The transition into such high-margin areas is paying off well. The company is benefiting from hyperscaler AI spending and data center expansion. Its growth is propelled by growing demand for AI/ML compute systems, 800G networking switches, storage infrastructure and next-generation AI networking platforms. These factors are driving growth in the Connectivity & Cloud Solutions segment. The segment’s revenues surged 76% year over year to $3.24 billion in the first quarter.
Celestica’s diverse portfolio and growing presence across several high-value markets are positive. Its Advanced Technology Solutions segment is witnessing solid traction in the HealthTech market. The capital equipment business is also recovering. The company’s portfolio optimization efforts in the Aerospace & Defense business contributed to higher profitability.
CLS is generating a solid return on capital. Adjusted return on invested capital approached 50% during the quarter, backed by efficient capital deployment, strong operating discipline and improving business mix. Moreover, the company continues to maintain a strong balance sheet and ample liquidity to support expansion initiatives. Backed by solid momentum across multiple verticals, Celestica raised its 2026 revenue outlook from $17 billion to $19 billion and increased adjusted earnings per share (EPS) guidance from $8.75 to $10.15. The company also lifted its operating margin forecast to 8.1%, up from the prior expectation of 7.8%.
The company faces competition in the industry from other major players such as Jabil and Flex. However, its strong liquidity and diverse portfolio allow it to fend off the competition to some extent.
The Case for Verizon
During the quarter, Verizon returned to positive first-quarter postpaid phone net additions for the first time since 2013. The company added 55,000 postpaid phone customers during the first quarter of 2026, representing a more than 340,000 improvement year over year. The company is successfully improving customer acquisition economics. It stated that acquisition and retention costs declined roughly 35% from the fourth-quarter levels while subscriber additions improved.
Broadband continues to be a major growth driver for Verizon. During the quarter, the company added 341,000 broadband subscribers, including 214,000 fixed wireless access subscribers and 127,000 fiber broadband customers. An AI infrastructure ecosystem, which includes GPUs, cloud regions, storage clusters and edge locations, requires fast and robust connectivity for optimal functionality. With steady investment in fiber networks, edge computing and AI-focused WAN infrastructure, Verizon is aiming to position itself as the backbone of this growing AI ecosystem.
However, it is to be noted that Verizon’s biggest challenges remain its very high debt burden. Total debt increased to approximately $172.5 billion in the first quarter of 2026, while interest expense rose to nearly $1.94 billion during the quarter. The telecom industry remains intensely competitive. Verizon faces aggressive competition from rivals such as AT&T, Inc. (T - Free Report) and T-Mobile US. Inc. (TMUS - Free Report) . T-Mobile continues to lead the industry in subscriber growth and aggressive pricing, while AT&T has recently shown strong wireless and fiber momentum.
Competitors like AT&T are also focusing on customer experience and convergence strategy to improve churn rate. Although VZ saw great improvement in churn in the first quarter, the trend might not persist in the long run as competitors initiate similar strategies. T-Mobile is expanding its coverage and upgrading its network to gain a competitive edge. Such factors can impact Verizon’s growth prospects.
Verizon’s wireline business continues to face structural weakness. Traditional legacy wireline operations remain under pressure from cord-cutting trends, declining enterprise legacy services and shifts toward wireless-first connectivity solutions.
How Do Zacks Estimates Compare for CLS & VZ?
The Zacks Consensus Estimate for CLS’s 2026 sales implies year-over-year growth of 53.82%, while that for EPS suggests a rise of 67.93%. The EPS estimates have been trending northward (up 15.06%) over the past 60 days.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Verizon’s 2026 sales implies year-over-year growth of 3.45%, while that for EPS suggests growth of 5.31%. The EPS estimates have been trending northward (up 0.61%) over the past 60 days.
Image Source: Zacks Investment Research
Price Performance & Valuation of CLS & VZ
Over the past year, CLS shares have surged 221.3%, while Verizon stock has gained 4.7%.
Image Source: Zacks Investment Research
VZ looks more attractive than CLS from a valuation standpoint. Going by the price/earnings ratio, Verizon’s shares currently trade at 9.15 times forward 12 months, lower than 30.29 for CLS.
Both Celestica and Verizon expect revenues and earnings to improve in 2026. Celestica shows a significantly stronger upward estimate revision and higher revenue and EPS projection for 2026. Celestica’s diverse portfolio and strong presence across multiple end markets make it more resilient against macro headwinds compared to Verizon. Hence, with a better price performance and Zacks Rank, Celestica appears to be a better investment option at present.
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VZ vs. CLS: Which Tech Infrastructure Stock Is a Better Buy Now?
Key Takeaways
The rapid expansion of AI, cloud computing and data-intensive applications is creating massive demand for next-generation digital infrastructure. While traditional telecom giants are upgrading networks to support AI-driven connectivity, hardware and data center suppliers are benefiting from hyperscaler spending on AI infrastructure. Amid this backdrop, let's evaluate which of the two established telecom leaders, Verizon Communications, Inc. (VZ - Free Report) or Celestica, Inc. (CLS - Free Report) , offers the better investment opportunity now.
Headquartered in Ontario, Canada, Celestica is one of the largest electronics manufacturing services companies in the world, primarily serving original equipment manufacturers, cloud-based and other service providers and enterprises from several industries. Verizon is one of the leading providers of local phone service, long-distance calls, wireless and data services.
Let us delve a little deeper into the companies’ competitive dynamics to understand which of the two is relatively better placed in this broader sector.
The Case for Celestica
Celestica has steadily expanded beyond traditional electronics manufacturing into emerging domains such as AI infrastructure manufacturing, high-speed networking systems, advanced platform solutions, liquid-cooled AI systems and optical networking. The transition into such high-margin areas is paying off well. The company is benefiting from hyperscaler AI spending and data center expansion. Its growth is propelled by growing demand for AI/ML compute systems, 800G networking switches, storage infrastructure and next-generation AI networking platforms. These factors are driving growth in the Connectivity & Cloud Solutions segment. The segment’s revenues surged 76% year over year to $3.24 billion in the first quarter.
Celestica’s diverse portfolio and growing presence across several high-value markets are positive. Its Advanced Technology Solutions segment is witnessing solid traction in the HealthTech market. The capital equipment business is also recovering. The company’s portfolio optimization efforts in the Aerospace & Defense business contributed to higher profitability.
CLS is generating a solid return on capital. Adjusted return on invested capital approached 50% during the quarter, backed by efficient capital deployment, strong operating discipline and improving business mix. Moreover, the company continues to maintain a strong balance sheet and ample liquidity to support expansion initiatives. Backed by solid momentum across multiple verticals, Celestica raised its 2026 revenue outlook from $17 billion to $19 billion and increased adjusted earnings per share (EPS) guidance from $8.75 to $10.15. The company also lifted its operating margin forecast to 8.1%, up from the prior expectation of 7.8%.
The company faces competition in the industry from other major players such as Jabil and Flex. However, its strong liquidity and diverse portfolio allow it to fend off the competition to some extent.
The Case for Verizon
During the quarter, Verizon returned to positive first-quarter postpaid phone net additions for the first time since 2013. The company added 55,000 postpaid phone customers during the first quarter of 2026, representing a more than 340,000 improvement year over year. The company is successfully improving customer acquisition economics. It stated that acquisition and retention costs declined roughly 35% from the fourth-quarter levels while subscriber additions improved.
Broadband continues to be a major growth driver for Verizon. During the quarter, the company added 341,000 broadband subscribers, including 214,000 fixed wireless access subscribers and 127,000 fiber broadband customers. An AI infrastructure ecosystem, which includes GPUs, cloud regions, storage clusters and edge locations, requires fast and robust connectivity for optimal functionality. With steady investment in fiber networks, edge computing and AI-focused WAN infrastructure, Verizon is aiming to position itself as the backbone of this growing AI ecosystem.
However, it is to be noted that Verizon’s biggest challenges remain its very high debt burden. Total debt increased to approximately $172.5 billion in the first quarter of 2026, while interest expense rose to nearly $1.94 billion during the quarter. The telecom industry remains intensely competitive. Verizon faces aggressive competition from rivals such as AT&T, Inc. (T - Free Report) and T-Mobile US. Inc. (TMUS - Free Report) . T-Mobile continues to lead the industry in subscriber growth and aggressive pricing, while AT&T has recently shown strong wireless and fiber momentum.
Competitors like AT&T are also focusing on customer experience and convergence strategy to improve churn rate. Although VZ saw great improvement in churn in the first quarter, the trend might not persist in the long run as competitors initiate similar strategies. T-Mobile is expanding its coverage and upgrading its network to gain a competitive edge. Such factors can impact Verizon’s growth prospects.
Verizon’s wireline business continues to face structural weakness. Traditional legacy wireline operations remain under pressure from cord-cutting trends, declining enterprise legacy services and shifts toward wireless-first connectivity solutions.
How Do Zacks Estimates Compare for CLS & VZ?
The Zacks Consensus Estimate for CLS’s 2026 sales implies year-over-year growth of 53.82%, while that for EPS suggests a rise of 67.93%. The EPS estimates have been trending northward (up 15.06%) over the past 60 days.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Verizon’s 2026 sales implies year-over-year growth of 3.45%, while that for EPS suggests growth of 5.31%. The EPS estimates have been trending northward (up 0.61%) over the past 60 days.
Image Source: Zacks Investment Research
Price Performance & Valuation of CLS & VZ
Over the past year, CLS shares have surged 221.3%, while Verizon stock has gained 4.7%.
Image Source: Zacks Investment Research
VZ looks more attractive than CLS from a valuation standpoint. Going by the price/earnings ratio, Verizon’s shares currently trade at 9.15 times forward 12 months, lower than 30.29 for CLS.
Image Source: Zacks Investment Research
End Note
Celestica carries a Zacks Rank #2 (Buy), while Verizon carries a Zacks Rank of 3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Both Celestica and Verizon expect revenues and earnings to improve in 2026. Celestica shows a significantly stronger upward estimate revision and higher revenue and EPS projection for 2026. Celestica’s diverse portfolio and strong presence across multiple end markets make it more resilient against macro headwinds compared to Verizon. Hence, with a better price performance and Zacks Rank, Celestica appears to be a better investment option at present.