Is CLS a good stock to buy? We came across a bullish thesis on Celestica Inc. on r/ValueInvesting by Wooden_Fondant_703. In this article, we will summarize the bulls’ thesis on CLS. Celestica Inc.’s share was trading at $386.50 as of June 8th. CLS’s trailing and forward P/E were 45.06 and 36.76 respectively according to Yahoo Finance.
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Celestica Inc., together with its subsidiaries, provides supply chain solutions in Asia, North America, and internationally. CLS is emerging as a rapidly re-rating Electronic Manufacturing Services (EMS) player, with its latest quarter reinforcing the scale of its transformation but also sharpening the market’s focus on execution. In Q1, the company delivered a strong beat with revenue up 53% year over year and margins reaching 8%, but the more important signal came from its sharply raised 2026 revenue outlook of $19.0 billion.
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Just 90 days earlier, management had already lifted guidance to $17.0 billion, implying that expectations have accelerated meaningfully in a short period. Relative to 2025 revenue of $12.39 billion, the new target suggests roughly $6.6 billion in incremental revenue within a single year, effectively exceeding the total revenue the company generated in 2021. This underscores that Celestica is no longer a traditional EMS name but is increasingly leveraged to the AI infrastructure buildout cycle, particularly driven by hyperscaler demand.
Despite this strength, the stock declined about 7.6% post-earnings as investor expectations have reset to a higher bar. At roughly $390 per share, or around 38x 2026 adjusted earnings, the market is now focused less on demand existence and more on durability, scalability, and execution credibility.
Management highlighted improved visibility into 2027 and referenced a new hyperscaler program, reinforcing that demand visibility is extending, but Celestica remains fundamentally a hardware and manufacturing-led business that must invest ahead of revenue realization. Capital expenditures rising to $229.5 million from $36.7 million highlight this front-loaded investment cycle required to support growth.
The setup remains constructively bullish, as the magnitude of guidance revisions and hyperscaler exposure point to sustained AI-driven demand acceleration. However, the upside case is tightly linked to execution, particularly Celestica’s ability to expand capacity efficiently and convert backlog visibility into realized earnings growth. If management delivers on this trajectory, the company could continue to re-rate higher as it transitions from cyclical EMS exposure to a structural AI infrastructure beneficiary.
Previously, we covered a bullish thesis on Celestica Inc. (CLS) by OrangeEveryday in March 2025, which highlighted structural EMS-driven growth, strong execution, and valuation upside with a price target of $104 despite macro risks and customer concentration concerns. CLS’s stock price has appreciated by approximately 331.45% since our coverage. Wooden_Fondant_703 shares a similar view but emphasizes AI-driven re-rating, hyperscaler demand, and execution-dependent upside tied to capacity expansion and revenue realization.
Celestica Inc. is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 67 hedge fund portfolios held CLS at the end of the first quarter which was 71 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.
Disclosure: None.
