It’s not quite common to see a inventory skyrocket over 2,600% in simply three years. However that’s precisely what Celestica (TSX:CLS) inventory has achieved. Based mostly in Toronto, this international participant designs and manufactures {hardware} platforms, and gives provide chain options for knowledge centres, synthetic intelligence (AI), and superior tech industries. On the time of writing, CLS inventory was buying and selling at $419.27 per share with a market cap of $48 billion.
And the most effective half is, its sturdy momentum doesn’t appear to be fading anytime quickly. With AI exploding throughout market sectors, Celestica’s positioning within the AI-driven knowledge centre area is opening up large development alternatives. Let me rapidly stroll you thru three strong the reason why CLS inventory seems too good to disregard proper now, and why it may nonetheless ship far more upside.
File development in the midst of an AI increase
Apparently, Celestica inventory has jumped by practically 256% within the final yr alone, and over 4,400% in 5 years. Whereas that may look like a inventory that has already run its course, its accelerating monetary development traits counsel this journey may be getting began.
Within the third quarter, Celestica’s income jumped 28% YoY (year-over-year) to US$3.2 billion. Extra importantly, its adjusted quarterly earnings soared by 52% YoY to US$1.58 per share – beating analysts’ estimates and the corporate’s personal steering. The corporate’s profitability within the newest quarter was primarily lifted by sturdy demand from hyperscalers investing in AI infrastructure.
Its connectivity and cloud options section, which incorporates the corporate’s AI {hardware} platform options, noticed its income climb practically 43% YoY within the newest quarter.
Stable execution and upgraded outlooks
The second clearest motive to purchase CLS inventory now could be its behavior of elevating the bar – after which beating it. Just lately, the corporate upgraded its full-year 2025 outlook. It’s now anticipating full-year income to hit US$12.2 billion and adjusted earnings to achieve US$5.90 per share, increased than its prior projections.
On the brighter aspect, Celestica’s early steering for 2026 seems much more spectacular. The corporate expects US$16 billion in income and US$8.20 per share in adjusted earnings – reflecting strong development. These expectations are primarily based on continued energy from Celestica’s largest prospects, lots of whom are ramping up spending on AI knowledge infrastructure.
In the meantime, sturdy execution can be clearly seen in its profitability. Within the newest quarter, Celestica’s adjusted internet revenue margin expanded to five.7%, whereas its adjusted return on invested capital stood agency at 37.5% – each reflecting notable enhancements from a yr in the past.
Investing for the long run with modern options
As a substitute of simply using the AI wave, Celestica can be getting ready for it. Earlier this month, it launched the SD6300 storage platform, one of many densest and most compact options within the business. Designed for AI-heavy workloads and enterprise storage, this method permits hyperscalers and huge enterprises to pack extra storage into much less area whereas reducing down on working prices.
On the similar time, the corporate is investing closely in new platforms, engineering expertise, and design innovation to remain forward of AI-driven demand.
These strong elementary components imply Celestica’s long-term story now seems even brighter – giving its inventory the potential to maintain hovering within the years to return.
