CLS

CLS is seeing strong AI infrastructure demand, with AI compute, networking and custom rack systems poised to drive revenue growth.

The mean of analysts' price targets for Celestica (CLS) points to a 38.3% upside in the stock. While this highly sought-after metric has not proven reasonably effective, strong agreement among analysts in raising earnings estimates does indicate an upside in the stock.

When deciding whether to buy, sell, or hold a stock, investors often rely on analyst recommendations. Media reports about rating changes by these brokerage-firm-employed (or sell-side) analysts often influence a stock's price, but are they really important?

CLS and ANET are expanding their AI infrastructure roles as demand grows across networking, computing and data centers.

MU, STX, FIX, VRT and CLS are growth stocks for August, with AI-driven demand highlighting opportunities in the ongoing market rally.

Celestica Inc. delivered a strong Q2 CY26, with accelerating AI networking switch revenues and significant gross margin expansion. CLS is capitalizing on hyperscaler demand by investing $1B in capex, securing raw materials to support unprecedented growth and margin resilience. The recent $3B equity offering, while dilutive short-term (~8.4–10%), strategically funds capex and positions CLS for sustained high growth and margin expansion.

Celestica Inc. is experiencing strong AI infrastructure-driven demand, prompting a 32% FY26 guidance upgrade and robust multi-year revenue growth expectations. A $3B equity raise will fund capex and working capital but introduces immediate dilution (up to 9.7%) and extends return timelines, creating an EPS headwind. Despite rising inventory days, CLS is improving cash flow conversion through increased supplier payables, with OCF/EBITDA nearing 80%.

Celestica Inc. is downgraded to Hold after a $3 billion equity offering causes near-term dilution and valuation premium risk. CLS's equity raise dilutes shares by ~8.4%, pressuring forward EPS and likely prompting negative earnings revisions in the coming months. Growth catalysts remain strong, including new AI infrastructure projects with Broadcom and AMD, but top-line benefits will materialize gradually.

Celestica is positioned as a key AI infrastructure supplier, benefiting from hyperscaler investments in data centers, cloud, and high-speed networking. CLS's Connectivity and Cloud Solutions segment drives rapid growth, with an 84% YOY revenue increase and a major catalyst in the 1.6T networking platform ramp through 2027. My base case values CLS at $434/share (31% upside), assuming $34.24B revenue, 9% margin, and $20.66 EPS in 2027, supported by accelerating earnings and margin expansion.

TORONTO--(BUSINESS WIRE)--Celestica Inc. (NYSE: CLS) (TSX: CLS) (“Celestica” or the “Company”), a global leader in data center infrastructure and advanced technology solutions, today announced the pricing of its previously announced equity offering of 9,677,419 common shares at a price to the public of $310 per share (the “Offering”). The gross proceeds from the Offering, before underwriting discounts and Offering expenses, are expected to be $3,000,000,000. Celestica has granted the underwrite.