We came across a bullish thesis on Celestica Inc. on Value & Momentum by Denis D.’s Substack. In this article, we will summarize the bulls’ thesis on CLS. Celestica Inc.’s share was trading at $270.64 as of March 4th. CLS’s trailing and forward P/E were 35.89 and 28.99 respectively according to Yahoo Finance.
Celestica (CLS) has emerged as a leading player in the AI and data center infrastructure market, driven by its Electronics Manufacturing Services (EMS) and Original Design Manufacturer (ODM) capabilities. The company operates through two main segments: Connectivity and Cloud Solutions (CCS), which contributes 67% of revenue and focuses on hyperscalers with AI-optimized servers, networking switches, and storage platforms, and Advanced Technology Solutions (ATS), serving aerospace, industrial, and HealthTech clients.
CLS has demonstrated exceptional execution with 13 consecutive earnings beats, Q4 2025 revenue of $3.67 billion (up 44% YoY), EPS of $1.89 (up 70% YoY), and substantial guidance upgrades for FY2026. Free cash flow generation is strong, and the balance sheet remains healthy with a debt ratio under 12%, supporting operational flexibility and growth investments.
The company’s growth is underpinned by the AI/data center mega-trend, particularly its Hardware Platform Solutions (HPS), which grew 63% in 2024, serving top hyperscalers such as Amazon, Google, and Meta. While revenue concentration is notable, with the top two CCS customers accounting for 39% of sales, Celestica’s market-leading design and manufacturing capabilities position it to capitalize on the continued surge in demand for AI infrastructure. Recent insider selling and high valuation (P/E of 53x) signal caution, but these are balanced by a PEG ratio near 1.2x and resilient fundamentals.
Despite short-term volatility and an 18% pullback from peak levels, Celestica’s dominant position in a high-growth, AI-driven market, combined with robust execution, strong cash flow, and high risk/reward profile, make it a compelling buy. At current levels, the stock offers investors a rare opportunity to gain exposure to a parabolic momentum play underpinned by tangible growth drivers and long-term structural demand, suggesting significant upside potential after a possible pullback to $200-$250 range while the business fundamentals remain solid.
Previously, we covered a bullish thesis on Celestica Inc. (CLS) by OrangeEveryday in March 2025, highlighting its strong position in electronic manufacturing and design solutions and long-term demand for technological upgrades. CLS’s stock price has appreciated by approximately 202.12% since our coverage. Denis D. shares a similar view but emphasizes CLS’s leadership in AI/data center infrastructure and rapid growth in Hardware Platform Solutions.
Celestica Inc. is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 71 hedge fund portfolios held CLS at the end of the fourth quarter which was 62 in the previous quarter. While we acknowledge the risk and potential of CLS as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than CLS and that has 10,000% upside potential, check out our report about this cheapest AI stock.
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Disclosure: None.
