Celestica Stock Jumps 12% on Raised Guidance and AI Boom

Celestica (CLS) shares surged more than 12% on Tuesday after the engineering and supply chain solutions provider reported exceptional third-quarter results and lifted its full-year profit targets.

The company's revenue soared 83% year over year to $5.8 billion, driven by a 102% surge in connectivity and cloud solutions revenue to $4.9 billion. Compute and storage-related sales growth was particularly impressive at 242%, fueled by rising demand for artificial intelligence (AI) infrastructure from large-scale cloud computing customers.

Profitability also improved, with adjusted operating margin expanding to 8.5% from 7.6% a year ago, and adjusted earnings per share jumping 109% to $3.30.

Encouraged by ongoing sales trends, Celestica raised its full-year guidance: revenue is now expected to rise 69% to $21 billion, and adjusted EPS to grow 91% to $11.55, up from prior forecasts of $20.5 billion and $11.30.

Investors were perhaps even more pleased with the company's 2027 outlook, which projects revenue and adjusted EPS to soar to $40 billion and $21.50, respectively. CEO Rob Mionis said Celestica is well-positioned to support leading hyperscalers and frontier AI labs through the ongoing AI infrastructure supercycle, with customer demand forecasts meaningfully higher for 2028.

Celestica's results and guidance provide further evidence that the AI infrastructure buildout is accelerating, not slowing. The 242% growth in compute and storage sales highlights the insatiable demand for AI hardware from cloud service providers.

By raising its 2027 revenue target to $40 billion—nearly double its expected 2025 revenue—Celestica is signaling that it sees a multi-year runway for growth. This visibility is rare and suggests the company has secured significant commitments from its hyperscaler customers.

The improved operating margin shows that Celestica is not just growing revenue but also scaling profitably, which is crucial for long-term shareholder value.

For investors, Celestica offers a way to play the AI infrastructure theme without directly owning chip stocks, which can be more volatile. Its diversified customer base and supply chain expertise make it a key enabler of the AI revolution.

However, the stock's sharp rally may have priced in much of the good news, and any slowdown in AI spending could lead to a correction. Nonetheless, the strong guidance for 2027 and beyond provides a solid foundation for future growth.