Celestica Inc. (CLS): The Canadian AI Stock You Need to Watch
Celestica Inc. (NYSE: CLS) (TSX: CLS) is a global leader in design, manufacturing, and supply chain solutions, serving industries such as aerospace, defense, healthcare, communications, and enterprise IT. Originally known for its electronics manufacturing services (EMS), Celestica has increasingly positioned itself as a major player in artificial intelligence (AI), cloud computing, and high-performance hardware solutions.
Recently, Celestica’s stock has been making waves, significantly outperforming other Canadian tech stocks. With its AI-driven infrastructure and strong demand for high-performance computing (HPC) solutions, Celestica is benefiting from the explosive growth of AI and cloud technologies. The company has secured major partnerships, enhancing its role in AI supply chains. Its strong fundamentals, innovative product lineup, and strategic positioning in the AI hardware space make it a compelling investment opportunity.
Key Business Segments and Growth Drivers
1. AI and High-Performance Computing Expansion
Celestica has emerged as a crucial player in the AI ecosystem by providing essential components and hardware infrastructure. With major tech firms racing to build AI-capable data centers, Celestica is well-positioned to supply the computing and networking hardware required for this transformation.
- AI hardware demand is surging, and Celestica is benefiting from the increasing need for high-performance servers and networking solutions.
- The company supplies critical AI accelerator modules used in data centers, enabling faster AI model training and deployment.
- As AI adoption grows, hyperscalers and enterprises are ramping up investments in AI infrastructure, directly boosting demand for Celestica’s offerings.
2. Diversified Revenue Streams
Celestica’s strength lies in its diversified business model, catering to multiple industries. This diversification helps mitigate risks associated with economic slowdowns in any single sector.
- Advanced Technology Solutions (ATS): Covers aerospace, defense, healthcare, and industrial solutions.
- Connectivity & Cloud Solutions (CCS): Supports cloud computing, AI, and data center infrastructure.
This diversified approach ensures that Celestica remains resilient even in volatile market conditions.
3. Strategic Partnerships and Acquisitions
The company continues to strengthen its market position through acquisitions and strategic partnerships.
- Celestica collaborates with major cloud service providers and AI firms to enhance its hardware and networking capabilities.
- The company’s ability to manufacture custom AI infrastructure components makes it a valuable supplier to AI-focused enterprises.
4. Strong Financial Performance and Market Outperformance
Celestica’s stock has significantly outperformed traditional tech stocks, thanks to its unique AI exposure.
- 6-month stock growth: Over 50%, beating competitors like Shopify and CGI.
- EPS Growth: Strong earnings per share growth, driven by higher-margin AI infrastructure sales.
Celestica Inc. (CLS): Above Key SMAs
Celestica’s stock price is trading above key moving averages, signaling strong bullish momentum. Its role in the AI hardware supply chain is attracting institutional and retail investors alike.
Why Celestica Stock is Gaining Traction
- AI Hardware Boom: Celestica benefits from the rapid expansion of AI-driven data centers.
- Strategic Partnerships: Collaborations with major cloud and AI companies boost revenue growth.
- Market Outperformance: CLS stock has surged over 50% in the past year, outpacing other Canadian tech stocks.
- Strong Fundamentals: The company maintains consistent earnings growth and a healthy balance sheet.
- Long-Term AI Play: Demand for AI infrastructure is expected to grow exponentially, positioning Celestica for sustained expansion.
Stock Performance Analysis: Celestica Inc. (CLS.TO)
| Metric | Value |
|---|---|
| 1-Year Stock Growth | +50% |
| Market Cap | $15.61B |
| 52-Week High | $206.57 |
| 52-Week Low | $55.10 |
| 50-Day MA | $159.74 |
| 200-Day MA | $103.12 |
📌 Celestica Inc. (CLS) has experienced a strong upward trend over the past year, reaching a 52-week high of $206.57. The stock remains above its 50-day and 200-day moving averages, reflecting strong investor confidence and momentum in the AI and cloud computing sectors.
Peer Comparison: Celestica vs. Other AI-Related Stocks
| Code | Name | GIC Sector | Market Cap | Beta | 52-Week High | 52-Week Low | 50-Day MA | 200-Day MA | Shares Short | Short Ratio | Short Percent |
|---|---|---|---|---|---|---|---|---|---|---|---|
| SHOP | Shopify Inc | Information Technology | 196.74B | 2.365 | 183.53 | 72.36 | 107.56 | 98.62 | 10,957,601 | 4.94 | 0.0151 |
| CSU | Constellation Software Inc. | Information Technology | 103.03B | 0.836 | 5,018.34 | 3,531.47 | 4,633.78 | 4,323.32 | 75,591 | 3.24 | 0.0083 |
| GIB-A | CGI Inc | Information Technology | 33.64B | 0.842 | 175.35 | 131.93 | 161.96 | 152.78 | 1,136,953 | 3.03 | 0.0164 |
| CLS | Celestica Inc. | Information Technology | 15.61B | 2.175 | 206.57 | 55.10 | 159.74 | 103.12 | 2,444,746 | 2.29 | 0.0213 |
| DSG | Descartes Systems Group Inc | Information Technology | 13.66B | 0.737 | 177.98 | 115.30 | 165.40 | 147.38 | 479,806 | 3.79 | 0.0051 |
| OTEX | Open Text Corp | Information Technology | 9.86B | 1.129 | 54.18 | 36.80 | 40.43 | 42.03 | 3,574,266 | 4.21 | 0.0138 |
| KXS | Kinaxis Inc | Information Technology | 4.52B | 0.826 | 190.17 | 132.93 | 169.75 | 161.93 | 149,538 | 2.05 | 0.0049 |
| BB | BlackBerry Ltd | Information Technology | 3.76B | 0.908 | 8.86 | 2.89 | 6.38 | 4.16 | 12,709,589 | 3.76 | 0.0215 |
| LSPD | Lightspeed Commerce Inc | Information Technology | 2.69B | 2.742 | 26.60 | 16.04 | 20.76 | 20.42 | 2,236,820 | 2.85 | 0.0161 |
| ENGH | Enghouse Systems Ltd | Information Technology | 1.42B | 0.685 | 35.04 | 25.12 | 27.18 | 29.52 | 1,106,536 | 13.96 | 0.0089 |
📌 Celestica Inc. (CLS) competes within the Canadian tech sector against industry giants like Shopify and Constellation Software. Its strong market cap growth and share performance reflect investor confidence in its AI and cloud-based solutions.
Valuation Metrics: Celestica Inc. (CLS.TO)
| Valuation Measures | Current | 9/30/2024 | 6/30/2024 | 3/31/2024 | 12/31/2023 | 9/30/2023 |
|---|---|---|---|---|---|---|
| Market Cap | 12.42B | 6.06B | 6.79B | 5.34B | 3.49B | 2.94B |
| Enterprise Value | 12.79B | 6.58B | 7.32B | 5.75B | 3.93B | 3.36B |
| Trailing P/E | 25.71 | 16.71 | 21.39 | 22.14 | 17.43 | 17.77 |
| Forward P/E | 19.65 | 12.72 | 17.27 | 15.38 | 10.62 | 9.67 |
| PEG Ratio (5yr expected) | — | — | — | — | — | — |
| Price/Sales | 1.14 | 0.70 | 0.82 | 0.68 | 0.45 | 0.39 |
| Price/Book | 5.68 | 3.36 | 4.00 | 3.03 | 2.01 | 1.74 |
| Enterprise Value/Revenue | 1.16 | 0.75 | 0.88 | 0.72 | 0.50 | 0.43 |
| Enterprise Value/EBITDA | 15.19 | 9.66 | 11.77 | 10.59 | 7.84 | 7.34 |
📌 Celestica’s valuation metrics show a strong upward trend, with a rising market cap and enterprise value, reflecting increased investor confidence and financial growth.
Final Thoughts: Is Celestica the Next Big AI Stock?
Celestica is no longer just a contract manufacturer—it is now an essential AI infrastructure supplier. Its strategic pivot towards AI, cloud computing, and data center solutions has positioned it as one of Canada’s most promising tech stocks. While AI remains a competitive space, Celestica’s strong partnerships, robust financials, and increasing demand for high-performance computing make it a standout choice for long-term investors.
TL;DR Summary: ✔ AI Hardware Leader: Supplies critical infrastructure for AI-driven data centers.
✔ Strong Growth: Stock has surged 50%+ in one year, outperforming peers.
✔ Valuation Upside: Forward P/E remains attractive compared to AI peers.
✔ Long-Term Potential: AI-driven infrastructure spending continues to rise.
For investors seeking exposure to AI growth without the volatility of software-focused companies, Celestica Inc. (CLS) is an excellent choice.
