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Celestica: The Outsourced AI Infrastructure Play the Market Still Underestimates

Updated: Jun 17

Summary

  • I rate Celestica (NYSE: CLS) a Strong Buy because the company is becoming one of the most important manufacturing and infrastructure partners in the AI ecosystem, benefiting from accelerating demand for AI servers, networking equipment, and cloud infrastructure.


  • Growth is being driven by hyperscaler spending, AI/ML compute deployments, 800G and 1.6T networking programs, and expanding relationships with major cloud customers. Management continues to see strong momentum extending into 2027.


  • The company delivered outstanding first-quarter results, including 53% revenue growth, 80% adjusted EPS growth, and a record 8.0% adjusted operating margin. Management also raised its 2026 revenue and earnings guidance.


  • While the stock trades at a premium P/E multiple, its FWD Non-GAAP PEG ratio of 0.74x suggests investors are paying relatively little for the company’s growth potential. Combined with improving margins and increasing AI exposure, I believe Celestica remains a compelling Strong Buy.

Aerial view of a large data center complex with gray buildings, rooftop solar panels, and dense cooling equipment.
Source: Seeking Alpha

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