The Canadian equity market has shown notable resilience over the past year, gaining steadily despite ongoing geopolitical tensions and persistent trade uncertainties. The S&P/TSX Composite Index has climbed about 35%, supported largely by strength in the basic materials sector and momentum in artificial intelligence (AI) stocks, which have driven accelerating investment in AI infrastructure.
Notably, several Canadian stocks have seen significant appreciation over the past year, and Celestica (TSX: CLS) is among the top performers. Over the past year, Celestica stock has surged approximately 341%. Moreover, the stock has more growth ahead driven by AI-led tailwinds.
Source: Getty Images
Into Celestica’s rally and recent financial performance
Celestica is a leading provider of data centre infrastructure and advanced technology solutions, well-positioned to capitalize on the rapid expansion of AI and cloud computing. As enterprises and hyperscale cloud providers invest heavily in AI infrastructure, demand for its products has surged.
Celestica’s growth is largely driven by its Connectivity & Cloud Solutions (CCS) segment, which serves communications and enterprise customers in fast-growing markets, including servers and storage. The segment offers high-performance networking switches, data centre interconnects, edge computing platforms, servers, and storage systems.
Strong demand for these products and solutions is driving Celestica’s financials, and the company is reporting solid growth. Its revenue rose 53% year over year to $4.1 billion in the first quarter (Q1) of 2026, driven by the CCS segment. Profitability also improved, with adjusted gross margin expanding by 30 basis points and operating margin rising 90 basis points. Celestica’s earnings per share (EPS) climbed 80% to $2.16.
Celestica’s Advanced Technology Solutions (ATS) segment generated $806 million in revenue, remaining flat year-over-year. Growth in HealthTech helped offset the impact of portfolio reshaping in the Aerospace and Defense (A&D) business and weaker capital equipment demand. ATS contributed 20% of total revenue.
Meanwhile, CCS revenue surged 76% to $3.2 billion, accounting for 80% of total revenue. Communications revenue grew 69%, supported by strong adoption of 800G networking switches among hyperscale customers. Enterprise revenue jumped 101%, driven by the rollout of next-generation AI and machine learning (AI/ML) infrastructure.
Within CCS, the Hardware Platform Solutions (HPS) business delivered $1.7 billion in revenue, up 63%, supported by multiple hyperscaler deployments of advanced networking solutions.
Celestica’s stock has more growth ahead
Celestica continues to execute well and appears positioned to deliver strong growth led by AI-driven demand. The company expects second-quarter revenue of $4.15 billion to $4.45 billion, implying roughly 49% growth at the midpoint. Adjusted EPS is projected to rise 61% year-over-year, while operating margin is forecasted to expand by 60 basis points.
Notably, Celestica’s growth will be driven by its CCS segment. Within this segment, communications revenue is forecast to rise around 50%, supported by expanding deployments of high-speed 800G and 400G networking switches. Enterprise demand is even stronger, with expected growth of about 130%, driven by scaling AI/ML compute programs with hyperscale customers and increased volumes in storage.
In the ATS segment, revenue is expected to grow at a mid-single-digit pace. This will be supported by new program ramps in HealthTech and Industrial markets, as well as a recovery in demand for capital equipment.
Looking ahead, Celestica has raised its full-year 2026 outlook to $19 billion, up from $17 billion, reflecting approximately 53% growth. Adjusted EPS guidance has also been increased to $10.15, representing 68% growth. Moreover, margins are expected to improve. Celestica anticipates stronger revenue growth in 2027, driven by continued program expansions and rising demand.
Overall, the outlook points to a robust demand environment, which could drive strong financial performance and support further upside in Celestica’s stock.
