1. Celestica Inc. (NYSE:CLS)
Number of Hedge Fund Holders: 62
3-year EPS growth: 82.49%
On January 30, Barclays raised its price target on Celestica Inc. (NYSE:CLS) to $391 from $359 while reiterating an Overweight rating, following the company’s upward revision to its fiscal 2026 outlook by approximately $1 billion. The analyst characterized the updated guidance as conservative, suggesting there is room for further upward revisions as the year progresses. Barclays’ constructive stance reflects confidence in sustained demand trends and improving earnings visibility, particularly as the company continues to deepen its exposure to high-growth end markets tied to next-generation computing infrastructure.
A day earlier, Celestica Inc. (NYSE:CLS) reported robust fourth-quarter and full-year 2025 results, with Q4 revenue increasing 44% year-over-year to $3.65 billion. Adjusted operating margins expanded meaningfully, and earnings per share improved substantially, contributing to full-year revenue growth of 28% to $12.39 billion and more than doubling GAAP EPS. Supported by accelerating demand for AI-driven data center hardware and enhanced clarity into customer deployment roadmaps, management raised its 2026 guidance to $17.0 billion in revenue and $8.75 in adjusted EPS. The company also announced plans to increase capital expenditures to $1 billion in 2026 to support long-term AI infrastructure programs, with funding expected to come from operating cash flow. This combination of strong execution, expanding margins, and self-funded growth investments reinforces the view that Celestica is well-positioned to capitalize on structural AI spending through 2027 and beyond.
Celestica Inc. (NYSE:CLS), founded in 1994 and headquartered in Toronto, is a multinational electronics manufacturing services provider offering design, engineering, manufacturing, and supply chain solutions. Operating across more than 15 countries, it serves sectors including artificial intelligence, aerospace, defense, health technology, and industrial markets, with a focus on complex, high-growth programs and data center infrastructure.
While we acknowledge the potential of CLS as the best Canadian growth stock to buy according to hedge funds, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than CLS and that has 100x upside potential, check out our report about this cheapest AI stock.
READ NEXT: The Best and Worst Dow Stocks for the Next 12 Months and 10 Unstoppable Stocks That Could Double Your Money.
Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.
