If you had invested $10,000 in Celestica (TSX:CLS) stock just three years ago, you might be looking at a portfolio value of over a quarter of a million dollars today. The top Canadian growth stock’s staggering 2,500% surge turns heads while leaving many investors wondering if they have completely missed the boat, or if there’s still more to Celestica’s marvellous revenue, earnings, and cash flow growth story that could drive positive returns for years to come.
Heading into the $35 billion electronics manufacturing services company’s third-quarter earnings report on October 27, Celestica may present a compelling case as a top TSX growth stock to buy in October for those with a long-term view. The company has found itself in the perfect position at the perfect time, serving as a critical manufacturing partner for the technology giants building the world’s artificial intelligence (AI) infrastructure.
What’s fuelling Celestica’s incredible growth?
Celestica’s recent success is directly tied to the massive spending spree by its hyperscale customers — the tech titans expanding their data centres for new AI applications. The company builds the essential high-performance networking equipment, like data centre switches, that allow these complex AI systems to function efficiently.
The company’s growing sales are being accompanied by expanding operating profit margins and surging earnings per share. In its second quarter of 2025, Celestica grew revenue by 21% to $2.9 billion, blowing past its own guidance. What’s more impressive is that its adjusted earnings per share (EPS), which represents the profit allocated to each share of stock, jumped by 54%. This powerful trend of profits growing faster than revenue attracts a rerating of a stock’s valuation multiples higher.
Celestica’s expanding operating margin, which hit a company record of 7.4% in 2025, is impressive for investors. Think of it this way: for every $100 in sales, the company is now pocketing $7.40, more profit after covering its operational costs than the $4.40 it used to make in 2023. This surge in profitability is largely driven by its Connectivity & Cloud Solutions (CCS) segment, which handles the high-demand AI hardware and boasts even higher adjusted operating margins of 8.3%.
Celestica’s deep moat in a high-tech market
Celestica’s revenue is usually highly concentrated on a few large customers. One might think that Celestica’s reliance on a few large customers is a major risk (and that’s basically true). However, the company has skillfully turned this concentration into a competitive advantage. Celestica doesn’t just assemble off-the-shelf parts; it engages in deep, co-design partnerships with its clients to develop customized products. These joint innovation programs create incredibly sticky relationships, making it difficult for competitors to swoop in and steal its business.
This leadership is evident in its product lineup. While demand for its 400G switches remains very strong in 2025, the company could see an aggressive ramp-up of its next-generation 800G switches during the second half of the year and into 2026. During the second quarter, volumes for 800G products grew to match the 400G business and are set to accelerate further.
This technological edge keeps Celestica stock at the heart of the AI hardware boom.
Can CLS stock’s momentum continue?
The company recently raised its full-year 2025 financial outlook, now expecting 20% revenue growth to $11.6 billion and a stunning 42% increase in adjusted EPS to $5.50 per share. Management’s optimism is supported by tangible growth drivers. The company planned to begin ramping up production for a next-generation AI compute program with a large hyperscaler customer during the third quarter, a new revenue source that will extend into the next year. Overall corporate margins could expand into double-digit levels if AI spending keeps ramping up over the next two to three years, driving the stock potentially higher.
Furthermore, Celestica continues to return value to shareholders through its stock buyback program, having repurchased approximately 600,000 shares in the second quarter alone. These buybacks reduce the number of shares outstanding, which helps to boost EPS.
CLS Shares Outstanding data by YCharts
While Celestica’s stock is no longer cheap by traditional metrics like the forward price-to-earnings (P/E) ratio, which towers above 47, CLS stock’s premium valuation reflects its explosive growth and strategic position. If the AI infrastructure build-out has years left to run, Celestica stock could still outperform the TSX over the next year or two.
