The Canadian equity market has proven remarkably resilient over the past year, even as investors navigate geopolitical tensions and persistent trade uncertainties. The S&P/TSX Composite Index has continued to trend higher, supported by low interest rates, steady consumer spending, investor enthusiasm for artificial intelligence (AI), and a rally in basic materials. Within this constructive backdrop, several Canadian stocks have delivered impressive gains, but Celestica (TSX:CLS), in particular, continues to crush the market.
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What’s behind the rally in Celestica stock
The company is a leading provider of data centre infrastructure and advanced technology solutions. As enterprises and cloud providers continue to expand AI-related infrastructure, demand for Celestica’s specialized hardware and systems has increased meaningfully.
A major driver of its growth is Celestica’s Connectivity & Cloud Solutions (CCS) segment. The division serves communications and enterprise customers, including the fast-growing server and storage markets. Its product portfolio spans high-performance networking switches, data centre interconnects, edge computing platforms, servers, storage systems, and routers. These technologies form the backbone of modern digital connectivity and are essential for handling the growing volume and complexity of data-intensive workloads driven by AI and cloud computing.
Notably, the strong demand for Celestica’s high-performance data centre networking equipment has translated into robust financial results, supporting its share price. Over the past year alone, Celestica shares have surged approximately 153%. The longer-term performance is even more compelling. Over the past five years, the stock has risen at a compound annual growth rate of more than 107%, translating into capital gains of roughly 3,728%.
Celestica stock to sustain momentum in 2026
Celestica is well-positioned to sustain its growth momentum into 2026, supported by strong demand across its core CCS segment. This segment has become the primary engine of the business, contributing 76% of total company revenue in the third quarter of 2025.
Growth within CCS has been particularly robust in communications end markets, where revenues surged 82% year over year. This performance reflects strong demand for data centre networking equipment, especially as Celestica ramps multiple 800G switch programs for its largest hyperscaler customers. Demand for optical programs has also remained healthy.
A closer look at CCS highlights the strength of Celestica’s Hardware Platform Solutions (HPS) business. HPS generated $1.4 billion in revenue during the third quarter, representing 79% growth and accounting for 44% of total company revenue. The acceleration was driven almost entirely by increasing volumes led by next-generation 800G switching platforms.
Management expects this momentum to continue. Revenue in the communications end market is projected to grow in the high-60% range, reflecting sustained demand for data centre networking switches and ongoing ramps across multiple 800G programs. In the enterprise end market, the company anticipates a return to growth in the fourth quarter, with revenue expected to rise in the low-20% range. This rebound is expected to be led by the ramp-up of a next-generation hyperscaler program focused on AI and machine learning compute applications.
Looking further ahead, Celestica’s outlook for 2026 remains solid. The company projects strong double-digit growth in the top and bottom line. With hyperscalers and enterprise customers expected to continue investing heavily in AI and data centre infrastructure through 2027 and beyond, Celestica’s growth trajectory appears both durable and attractive.
