Celestica Stock Skyrockets on AI Boom: Q3 Blowout, Raised Forecasts Signal No Slowdown

CLS stock soars: Celestica Inc. (CLS) shares closed around C$424 on Oct. 27 ^[1], up ~2% on the day and ~13% for the past week ^[2]. The stock has skyrocketed over 300% in the last year amid a booming AI-driven rally ^[3].
Blowout earnings: Celestica smashed Q3 2025 estimates, with revenue up 28% to $3.19 billion and adjusted EPS up 52% to $1.58 ^[4]. Both metrics exceeded the high end of its guidance, prompting the company to raise its full-year 2025 outlook ^[5].
AI momentum: The company is capitalizing on surging demand for AI/data center hardware. It introduced new 1.6-terabit Ethernet switches this month for AI/ML data centers ^[6], and now forecasts 2026 revenue to jump ~31% to $16 billion as its ‘largest customers’ continue heavy AI infrastructure investments ^[7].
Analysts bullish: Wall Street remains upbeat on Celestica. RBC Capital raised its target to $225, citing “robust demand from hyperscalers” ^[8], while Stifel upped its target to $230, highlighting “growth driven by AI demand.” ^[9] One recent analyst even set a C$428 price target alongside a Buy rating ^[10].
Reinvented tech veteran: Celestica has transformed from a dot-com bust survivor into an AI-era growth story. The 31-year-old Toronto firm has “shot from near obscurity to stock stardom on the AI juggernaut” ^[11], becoming a key supplier of data center hardware to today’s tech giants.

CLS Stock Surges on AI Wave

TORONTO – Celestica’s stock is on fire. The electronics manufacturing company’s shares continued their remarkable run on Monday, rallying to new highs as investors bet on the artificial intelligence (AI) hardware boom. Celestica’s Toronto-listed stock closed at approximately C$424 per share ^[12] on October 27, extending a multi-session upswing. The weekly gain now tops 13% ^[13], and the stock has climbed an astonishing ~316% over the past year ^[14] – a growth rate that vastly outpaced the broader market. This historic rally reflects surging optimism that Celestica will be a big winner in the rush to build out AI data centers and cloud infrastructure.

Once known mainly as a contract electronics maker, Celestica has reinvented itself for the AI age. The company – founded in the 1990s and a former IBM unit – was a dot-com era veteran that languished for years. Now it’s riding a new wave of demand. As the Financial Post noted, this “31-year veteran of Canada’s tech scene” has suddenly “shot from near obscurity to stock stardom on the AI juggernaut” ^[15]. In other words, Celestica has gone from a forgotten name to one of this year’s stock market darlings, thanks to its strategic pivot into high-growth tech segments.

Blowout Q3 Earnings and Upbeat Outlook

Celestica’s latest financial results underscore why the stock is soaring. After markets closed on Oct. 27, the company announced third-quarter 2025 earnings that blew past expectations. Revenue for Q3 hit $3.19 billion – a 28% jump from a year ago – while adjusted earnings were $1.58 per share, up 52% year-on-year ^[16]. These figures exceeded the high end of Celestica’s own guidance ranges for the quarter ^[17], marking one of the strongest quarters in the company’s history.

“We achieved very strong results in the third quarter, with revenue of $3.19 billion and non-GAAP adjusted EPS of $1.58, representing growth of 28% and 52%, respectively, each exceeding the high end of our guidance,” said Celestica CEO Rob Mionis in the earnings release ^[18]. The company also delivered record-high margins, reflecting operational efficiencies alongside booming demand.

Buoyed by these results, Celestica raised its full-year forecast for 2025. Management now expects $12.2 billion in revenue and $5.90 in adjusted EPS for the year, up from prior estimates of $11.55 B and $5.50 ^[19]. In other words, the outlook has improved meaningfully – a clear sign that Celestica’s growth momentum is accelerating.

Looking further ahead, the company issued an early peek at 2026, and it’s extremely bullish. Celestica is projecting 2026 revenue of $16.0 billion with about $8.20 in EPS, which would equate to roughly 31% top-line growth next year ^[20]. This ambitious target underscores management’s confidence that the current surge in orders will continue. Demand “remains strong” from Celestica’s largest customers, who are “making significant investments in AI data center infrastructure,” Mionis noted – trends the company believes will carry through 2026 and even into 2027 ^[21].

Riding the AI Data Center Boom

Celestica’s hot streak is directly tied to the AI and cloud computing boom that is driving massive investments in data center hardware. The company specializes in building advanced electronics for other businesses – and right now its customers can’t get enough servers, circuit boards, and networking gear to support AI workloads.

To capitalize on this, Celestica has been launching new high-performance products geared toward AI applications. In October, it unveiled a new family of 1.6-terabit Ethernet data center switches designed specifically for AI and machine learning clusters ^[22]. These cutting-edge switches (models DS6000 and DS6001) double the capacity of Celestica’s prior 800G solutions, enabling faster data throughput in large AI computing networks. The launch coincided with the OCP Global Summit, a major cloud infrastructure event, and sent a signal that Celestica intends to be a leading player in supplying the “plumbing” for AI data centers.

Investor reaction to Celestica’s AI push has been enthusiastic. As noted by Investing.com, the stock was already trading near its 52-week highs after the switch announcement, reflecting “strong investor confidence in its AI-focused initiatives.” ^[23] Celestica’s market capitalization has swelled to roughly C$48 billion, and year-to-date returns exceed 180% ^[24]. In essence, the market is rewarding Celestica for successfully pivoting into the “ picks-and-shovels ” side of the AI revolution – supplying equipment to the likes of cloud giants, rather than developing AI software itself.

Crucially, Celestica’s business spans more than just one-off sales; it operates in two segments, with the Connectivity & Cloud Solutions division (which includes data center, server, and networking equipment) now the primary growth engine. As hyperscale cloud companies (think Amazon, Google, Microsoft, etc.) race to expand their AI capacity, they are placing huge orders for the kind of hardware Celestica provides. The company confirms that its top customers – many of them cloud and tech titans – are ramping up spending on AI infrastructure at a rapid clip ^[25]. This has created a tidal wave of demand that Celestica is surfing to record revenues.

Analysts See More Upside (and Some Caution)

The breathtaking rally in Celestica’s stock has caught Wall Street’s attention. Analysts, on balance, remain bullish that the company’s growth story has room to run. Following Celestica’s strong results earlier this year, RBC Capital Markets raised its price target on the stock to $225 and reiterated an Outperform rating, citing “robust demand from hyperscalers” – a reference to those large cloud customers driving Celestica’s order book ^[26]. Similarly, Stifel upped its target to $230, highlighting Celestica’s “growth driven by AI demand.” ^[27] Both firms essentially argue that Celestica is benefiting from powerful secular tailwinds in tech and should continue to post impressive numbers as the AI buildout progresses.

More recently, as the shares continued climbing, at least one analyst pushed their projection even higher. TipRanks reports the latest analyst to weigh in gave Celestica a Buy rating with a price target of C$428 (about US$310) ^[28] – roughly in line with the stock’s current trading range. That suggests the Street sees the stock as fairly valued after its huge run, but still acknowledges the positive outlook (since few are recommending selling). In fact, Celestica currently carries a Zacks Rank #2 (Buy) and a strong Momentum Score of “B”, reflecting its positive earnings revisions and price trend ^[29]. Stocks with such credentials have often continued to outperform in the near term.

Not everyone is without reservations, however. The sheer speed of Celestica’s ascent has some experts urging a bit of caution. The stock now trades at multiples far above where it started the year, and any stumble in execution or a slowdown in AI spending could trigger a pullback. One fund manager noted back in the summer that Celestica was “already trading 30% above what analysts think it’s worth a year from now” – essentially warning that the market might have gotten ahead of itself ^[30]. He characterized the move as somewhat “parabolic” and advised being alert to the risk of a correction after such a steep climb ^[31]. Indeed, Celestica’s stock has been hitting all-time highs, a scenario that often comes with higher volatility.

For now, though, the bulls clearly have the upper hand. Celestica’s fundamentals are dramatically improved, and the global rush to build AI-capable infrastructure shows little sign of slowing. “The demand environment continues to strengthen,” CEO Mionis observed, as the company lifts its forecasts ^[32]. As long as tech giants keep pouring capital into next-generation data centers – and all indications are that they will, given AI’s transformative potential – Celestica stands to benefit. The company’s own confidence is evident in its raised guidance and robust 2026 targets.

Bottom line: Celestica has ridden the AI wave to become one of this year’s stock market stars. With a record-breaking quarter behind it and demand from AI “hyperscalers” still “remains strong” going forward ^[33], the momentum appears poised to continue. Investors should expect continued volatility, but many analysts agree that Celestica’s hot streak is supported by real growth drivers – not just hype ^[34]. In the words of one report, there’s “no slowdown in sight” for this once-underappreciated tech player turned market darling ^[35].

Sources: Celestica Q3 2025 Financial Results ^[36] ^[37]; TS2 Technology News ^[38] ^[39]; Investing.com ^[40] ^[41]; TipRanks ^[42] ^[43]; Stockchase/Analyst commentary ^[44] ^[45].

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