Celestica (TSX:CLS) stock is in the middle of a major growth transformation. One that could dramatically change its valuation and market position. The tech stock has shifted from low-margin manufacturing to high-growth segments like artificial intelligence (AI) hardware, aerospace, defence, and advanced industrial systems. These are sectors with strong demand and long multi-year contracts.
Its margins are expanding, its backlog remains strong, and recent earnings show accelerating profitability, meaning the business entering the next five years is far stronger than the one from the last five. So, let’s look at what’s been happening and if more growth is on the way.
What happened?
Over the past five years, Celestica stock has undergone a significant transformation. It shifted from a more traditional electronics manufacturing service (EMS) provider to a higher-margin player in advanced technology domains. Around 2020-2021, Celestica was still largely exposed to legacy EMS segments that were highly cyclical and margin-pressured, while it grappled with supply-chain disruptions and pandemic-related cost inflation. By approximately 2022-2023, Celestica began refocusing its strategy toward growth areas such as cloud/data-centre hardware, network infrastructure, and aerospace/defence systems.
More recently, Celestica stock has seen a leap forward. With the boom in AI, data-centre build-out, and demand for advanced systems, the company reported sharp revenue growth and margin expansion. For example, third-quarter (Q3) 2025 revenue jumped 28% year over year, and the company raised its guidance for full-year 2025 and beyond after results hit the high end of the range.
On the financial front, the stock’s historical data show a dramatic recent rise. Celestica stock is up over 250% in the last year alone, after years of more modest or flat returns. That suggests the market finally began pricing in the company’s strategic pivot and growth potential. Yet does that mean there’s more on the way?
Looking ahead
Celestica stock could look like a very different company in five years, because the business that exists today is already far more advanced, profitable, and strategically positioned than it was even two years ago. One of the biggest forces shaping Celestica stock’s next five years is the explosive build-out of AI data centres. Celestica stock already benefits from major, long-term customer relationships in this space, and as hyper-scalers invest in enormous next-generation data centre capacity, Celestica has the potential to become a “picks-and-shovels” winner in the AI infrastructure boom.
A second major growth engine is aerospace and defence, where Celestica stock has built strong credibility through engineering-heavy contracts and mission-critical manufacturing work. Celestica already supports several major defence companies, and these programs tend to last many years with high switching costs.
Furthermore, looking back, Celestica stock operated around low-single-digit margins typical of EMS firms. But with its pivot into higher-complexity, engineering-heavy programs, adjusted operating margins have been trending steadily upward. If Celestica continues to scale its advanced systems work, margins could realistically settle into the high-single-digit or even low-double-digit range — all while continuing to boast a disciplined balance sheet.
Bottom line
The biggest picture? Celestica stock is transitioning from a company that chased volume to one that delivers high-value, high-complexity, mission-critical systems. If it keeps executing, the Celestica of five years from now could be larger, more profitable, and valued in a completely different league.
