Artificial intelligence (AI) is transforming everything, from how we shop to how companies build their products. It’s easy to think the winners are all flashy tech giants or chipmakers, but Canada has its own players flying under the radar. One of them is Celestica (TSX:CLS), a tech stock that’s quietly becoming a top growth story in the AI revolution.
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About Celestica
You may not hear about it often, but Celestica has been building the backbone of tech infrastructure for years. It started as a contract electronics manufacturer, supplying parts to big-name clients. Over the last decade, it has shifted toward higher-margin, high-performance computing systems. And now, it’s playing a key role in the AI boom.
In its first quarter 2025 earnings, Celestica once again blew past expectations. The tech stock reported revenue of $2.65 billion, up from $2.21 billion the year before. Earnings per share (EPS) came in at $1.20, up from $0.83 last year. Even better, management confirmed full-year guidance, citing continued strong demand for its AI-related hardware and cloud infrastructure.
That kind of growth isn’t a one-time thing. Celestica is now a go-to partner for hyperscalers, those massive companies running the biggest cloud data centres in the world. As AI continues to require more processing power and energy-hungry servers, Celestica is there, designing, building, and scaling the systems behind it all. In other words, it’s not just a bystander in the AI revolution – it’s helping build the arena.
More to come
Despite all this momentum, the tech stock still trades at a relatively low valuation. As of writing, Celestica trades at 46 times forward earnings. That’s a major discount compared to U.S. tech peers, with similar or even slower growth. So while markets chase the big names, Celestica offers a more modest, grounded way to ride the same wave.
There’s also something to be said about how well-run the company is. It’s not racking up massive debt or burning through cash. In fact, Celestica continues to post strong cash flows and has a solid balance sheet. That gives it the flexibility to invest in future growth while weathering any economic slowdown. And unlike many tech names, it doesn’t need to keep raising capital to stay afloat.
The other strength that stands out is its diversification. While AI and data centres are the fastest-growing parts of the business, Celestica also serves industrial, aerospace, and defence clients. That gives it some stability when one segment cools off. But right now, all signs suggest the AI-related tailwinds aren’t going away anytime soon.
Bottom line
Of course, no stock is perfect. Celestica isn’t immune to global supply chain risks or tech sector slowdowns. And because it’s still categorized by many as a “boring” hardware stock, it might not get the attention – or premium valuation – it deserves in the short term. But if you’re investing with a multi-decade mindset, that’s exactly the kind of setup you want: strong fundamentals, massive long-term tailwinds, and a stock price that hasn’t caught up yet.
For investors willing to be early and patient, Celestica could be one of those rare stocks you look back on decades later and think, “I can’t believe how cheap it was.” In a market full of hype, it’s refreshing to find a company that’s simply doing the work and getting better quarter after quarter. That’s why, for me, Celestica is the ultimate AI growth play for the long haul.
