Valued at a market cap of almost $50 billion, Celestica (TSX:CLS) provides supply chain solutions and manufacturing services globally through two segments: Advanced Technology Solutions, and Connectivity and Cloud Solutions.
The company offers product design, development, manufacturing, assembly, testing, systems integration, and after-market services. It develops hardware platforms and infrastructure solutions for original equipment manufacturers, cloud service providers, hyperscalers, and companies in aerospace, defence, industrial, healthcare, communications, and enterprise markets.
The TSX tech stock has returned over 250% to shareholders in the past 12 months. Since December 2015, CLS stock is up over 2,700%. Simply put, a $1,000 investment in Celestica stock in December 2015 would be worth close to $28,000 today.
Despite these market-thumping returns, CLS stock is down 14% from all-time highs, allowing you to buy the dip.
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Is this TSX tech stock still a good buy?
Celestica is riding a massive wave of AI infrastructure investment, allowing it to report record sales in recent quarters. In Q3, it reported revenue of US$3.2 billion, up 28% year over year, driven by strong demand in the data centre networking business. It now expects revenue to grow by 26% year over year to US$12.2 billion in 2025.
Similar to other tech companies, Celestica is asset-light and projected to expand earnings by more than 50% year over year in 2025.
The growth story for the large-cap AI stock is far from over, given Celestica estimates revenue of US$16 billion and adjusted earnings of US$8.20 per share (up almost 40%) in 2026.
The company’s Connectivity and Cloud Solutions segment, which serves AI data centres, is expected to grow roughly 40% in 2026. Management indicated this momentum should continue into 2027 with multiple program ramps already secured.
Celestica’s hyperscaler platform solutions business is the key driver of top-line growth, given the segment is forecast to generate US$5 billion in sales in 2025, up 80% year over year.
The company has established itself as the market share leader in high-performance Ethernet switching, capturing 41% of total ports shipped across 200-gig, 400-gig, and 800-gig platforms. In the custom solutions segment serving hyperscalers, Celestica’s dominance is even more pronounced with a market share of 55%.
Celestica is also investing heavily in next-generation technologies, planning to increase research and development spending by at least 50% in 2026.
Is CLS stock still undervalued?
The Canadian AI powerhouse is backing up its growth projections with significant capacity investments, planning capital expenditures of 2% to 2.5% of revenue in 2026, funded entirely by operational cash flow. Major expansions are underway in Texas and Thailand to support the massive production ramps planned through 2028.
Analysts tracking CLS stock forecast revenue to increase from US$9.7 billion in 2024 to US$25.7 billion in 2028. In this period, adjusted earnings per share are forecast to grow from US$3.88 to US$14.14 per share.
If the TSX tech stock is priced at 30 times forward earnings, which is reasonable, it could gain 50% over the next two years. Given consensus price targets, CLS stock trades at a discount of 33% in December 2025.
