Celestica (TSX:CLS) is without doubt one of the top-performing shares on the S&P TSX Composite Index. The inventory is up about 242% 12 months to this point and has gained over 3,000% in three years, rising at a compound annual development fee (CAGR) of 214.3%.

This stable momentum in Celestica inventory stems from the worldwide growth in synthetic intelligence (AI) infrastructure spending. Celestica’s potential to design and ship personalized, high-performance {hardware} platform options (HPS) that meet the rigorous calls for of recent AI-driven environments positions it properly to capitalize on demand.

From engineering and manufacturing to superior provide chain and software program companies, Celestica gives end-to-end options that place it as a trusted companion for hyperscale cloud suppliers racing to construct next-generation knowledge centres.

This positioning is clearly mirrored within the firm’s monetary outcomes. Within the third quarter, income from Celestica’s Connectivity and Cloud Options (CCS) phase jumped to US$2.41 billion, a 43% enhance 12 months over 12 months. The CCS enterprise now accounts for roughly three-quarters of Celestica’s complete income, reflecting its key function within the firm’s development story.

Throughout the CCS phase, communications finish market revenues soared by 82%, far exceeding the corporate’s personal steerage of low-60% development. This spectacular enlargement was largely pushed by surging demand in knowledge centre networking, significantly for 800G change packages amongst its largest hyperscaler shoppers, complemented by continued energy in its optical product strains.

AI-supported demand to push Celestica inventory increased

Celestica’s development trajectory stays stable, with the continuing momentum throughout its communications finish market. Demand for its high-performance knowledge centre networking switches, particularly these tied to a number of 800G packages, continues to surge, supporting optimism for the quarters forward.

The enterprise phase is anticipated to return to development within the fourth quarter of 2025, with income more likely to climb by about 20% as Celestica ramps up manufacturing for a next-generation AI and machine studying compute program serving hyperscale clients.

The corporate’s strategic pivot towards higher-value choices by way of its {Hardware} Platform Options (HPS) portfolio, a part of its CCS division, gives a stable base for future development. Within the third quarter, its HPS enterprise generated US$1.4 billion in income, accounting for 44% of complete income.

As well as, Celestica has aggressively ramped up its funding in design engineering and know-how for knowledge centres. The corporate has intentionally exited lower-margin initiatives to give attention to advanced, high-return alternatives that strengthen buyer partnerships and enhance profitability. Additional, rising volumes are enhancing working leverage, whereas ongoing effectivity efforts throughout Celestica’s international community are driving productiveness positive aspects.

Celestica’s customer-centric provide chain technique additionally stands out, providing companions resilient, geographically diversified options amid international commerce uncertainty. Supported by strong operational money circulation, Celestica continues to broaden and improve its community capability, significantly in North America, to satisfy rising AI knowledge centre demand.

With hyperscaler and digital-native clients planning substantial manufacturing ramps by way of 2028, Celestica seems well-positioned to maintain development and capitalize on AI-driven demand.

Celestica inventory to greater than double in three years

The AI-led tailwinds will probably drive Celestica’s financials and share value increased within the coming years. Over the previous three years, the inventory has grown at a CAGR of greater than 214%. Even when that development tempo slows to a extra modest 30% CAGR, the inventory may nonetheless attain $997.68 in three years, greater than double its closing value of $454.11 on October 28.