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Does Celestica (CLS) have what it takes to be a top stock pick for momentum investors? Let's find out.
Celestica is successfully transitioning from low-margin EMS to higher-margin ODM, driving margin expansion and a stronger investment case. HPS revenue mix rose to 42% in Q1 FY26, up 400 bps sequentially, directly boosting adjusted operating margins and supporting a higher valuation. CLS is positioned for further margin gains with leading-edge HPS products, including 1.6T and 3.2T CPO switches, ramping in late 2026 and 2027.
Celestica (CLS) could produce exceptional returns because of its solid growth attributes.
Here is how Celestica (CLS) and A10 Networks (ATEN) have performed compared to their sector so far this year.
Celestica (CLS) is at a 52-week high, but can investors hope for more gains in the future? We take a look at the company's fundamentals for clues.
Geopolitical risks linger, but FDX, TPR, CLS and VRT stand out for strong interest coverage ratios, signaling debt-paying strength.
Celestica is a leading AI infrastructure play, benefiting from robust Data Center and cloud hardware demand. Despite beating Q1 estimates and raising its FY 2026 revenue guidance, CLS shares dropped 14% after earnings. The Data Center-dependent CCS segment drives 80% of revenues, posting 76% year-over-year growth, and is targeting hyperscaler customers.
Celestica (CLS) shares have started gaining and might continue moving higher in the near term, as indicated by solid earnings estimate revisions.
Celestica's hyperscaler-driven CCS growth is accelerating, supported by 1.6T networking wins and AI/ML compute ramps, with management guiding very strong enterprise growth into 2027. Massive multiyear capacity expansion, including about $1 billion in capex this year and at least $1.5 billion next year, supports long-term demand visibility but pressures near-term free cash flow margins. Net downward revisions to hyperscaler capex estimates over the next 4 quarters may limit upside to Celestica's revenue catalysts if customers' spending fails to rise much above current expectations.
Celestica benefits from the record CapEx of hyperscalers, although there are new risks associated with component shortages. The partnership with AMD could become the reason for a new transformation of CLS, which will make it a more important player in the AI industry. The results for Q1 2026 are excellent, and the increase in forecasts is also positive. But there is no guarantee that a revenue push-out will not occur.
Celestica (CLS) has been upgraded to a Zacks Rank #1 (Strong Buy), reflecting growing optimism about the company's earnings prospects. This might drive the stock higher in the near term.