If you think you need to invest a big sum of money in large chipmakers to benefit from the data centre boom, think about everything that has to surround those chips first. A powerful processor isn’t much use sitting by itself. Artificial intelligence (AI) data centres need servers to house computing power, networking equipment, and storage systems to handle huge amounts of data, and plenty of specialized hardware to tie everything together. And somebody has to build all of that.
That’s exactly why I find Celestica (TSX: CLS) quite interesting today. In recent years, this Canadian technology giant has become an important supplier to this AI infrastructure buildout, and the opportunity is already showing up in its business.
In this article, I’ll explain why Celestica could be one of the best Canadian stocks to profit from the continuing data centre boom without simply chasing the biggest AI stocks.
Source: Getty Images
Celestica stock
To put it simply, Celestica designs and makes hardware platform and supply chain solutions. The business of this Toronto-based technology firm includes the Connectivity & Cloud Solutions (CCS) and Advanced Technology Solutions (ATS) segments. With its CCS segment, the company serves customers that are closely connected to growing data centre infrastructure needs.
After rallying more than 60% over the last year, Celestica stock currently trades at $407.67 per share, giving it a market cap of $51.3 billion. That rally makes more sense when you look at how quickly its business has been expanding.
The numbers behind the data centre boom
In the latest quarter ended in June, Celestica’s revenue surged 62% year-over-year (YoY) to US$4.7 billion. Its revenue figures surpassed the high end of its guidance range because of stronger-than-expected customer demand and solid operational execution.
At the same time, its profitability continued to move in the right direction. The company’s adjusted earnings climbed to US$2.54 per share from US$1.39 a year earlier. Also, its adjusted operating margin improved to a company record of 8.2% from 7.4%, mainly reflecting stronger-than-anticipated operating leverage.
More importantly, Celestica’s CCS segment revenue jumped 84% YoY to US$3.8 billion. Its hardware platform solutions revenue also surged 58% to roughly US$1.9 billion. These businesses put Celestica right in the middle of rising infrastructure demand linked to AI, cloud, and hybrid-cloud data centres.
Why the growth runway still looks strong
Interestingly, Celestica is continuing to witness stronger customer demand and better financial visibility. Improved component supply and new program wins are also supporting the company’s growth prospects.
The company now expects its revenue growth rate in 2027 to accelerate beyond the 65% growth anticipated for 2026. It also expects adjusted earnings per share to grow faster than revenue next year with higher anticipated adjusted operating margins.
Considering all these positive factors, Celestica looks like an attractive Canadian stock for investors hoping to benefit from the continued AI data centre boom. While its shares have recently pulled back, its business continues to post strong demand, rapid revenue growth, improving margins, and higher earnings.
