Celestica Raised Its 2027 Outlook After Sales Jumped 83%: Is It Too Late to Buy?

With revenue expected to grow 90% in 2027 and adjusted EPS projected to increase 86%, Celestica’s growth prospects remain compelling.

Sneha Nahata

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Sneha Nahata has been fascinated by the stock market for as long as she can remember. Growing up in a family of investors and stock brokers, conversations about businesses, markets, and investing were part of everyday life. What started as curiosity soon became a lifelong passion and, ultimately, a career. She began her professional journey at Zacks Investment Research, where she developed her analytical skills and gained experience evaluating investment opportunities. Sneha has been writing for The Motley Fool Canada since 2020, helping investors look beyond the headlines to identify long-term investment opportunities. Her work is also featured on Barchart. Sneha’s investing philosophy combines growth and dividend investing, with a focus on finding businesses that can build wealth over the long term. Outside of finance, Sneha enjoys sketching, exploring new creative ideas, and spending time with her family.

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Master of Science (M.Sc.) in Finance

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Technology stocks, media and telecommunications, banking and financial services, energy stocks, consumer stocks, dividend investing, growth stocks, fundamental analysis, company valuation, and long-term investing.

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Published November 13, 3:45 pm EST

Celestica (TSX: CLS) continues to deliver impressive growth, and its latest quarterly results show that momentum remains strong. The company reported an 83% year-over-year revenue increase in the third quarter, driven by strong demand for its data centre infrastructure and advanced technology solutions. The strong performance also encouraged management to raise its full-year outlook and signal even faster growth in 2027.

Thanks to its accelerating growth, Celestica stock has jumped more than 25% in just five trading days. After such a notable increase, it is natural to wonder whether the stock still has room to run. Interestingly, despite the recent gains, shares remain about 44.8% below their 52-week high.

Profit-taking following significant, broader selling in artificial intelligence (AI)-related stocks has dragged its share price lower. However, Celestica’s fundamentals remain solid, and the company is expected to deliver strong growth ahead, supporting its investment case and making it a buy.

Digital background depicting innovative technologies in (AI) artificial systems, neural interfaces and internet machine learning technologies — Source: Getty Images

Celestica keeps growing at a solid pace

Celestica continues to grow rapidly, led by accelerating demand for AI infrastructure, hyperscale computing and advanced networking solutions. In Q3, revenue surged 83% year over year to $5.8 billion, while adjusted operating margin expanded by 90 basis points to 8.5%, reflecting improved profitability across both its Connectivity & Cloud Solutions (CCS) and Advanced Technology Solutions (ATS) segments. Adjusted EPS more than doubled, increasing 109% to $3.30.

The CCS segment is the company’s primary growth driver, generating $4.9 billion in revenue, up 102%, and representing approximately 84% of consolidated sales. Networking revenue increased 68%, driven by strong 800G demand and initial contributions from emerging 1.6T programs. Meanwhile, compute and storage revenue jumped 242%, reflecting higher hyperscaler AI infrastructure deployments and stronger storage demand.

ATS revenue jumped 23% to $957 million, driven by improved capital equipment demand and strength across other business lines.

Management’s Q4 guidance indicates that this momentum is likely to continue. Revenue is projected at $6.28–$6.58 billion, implying 76% growth at the midpoint, while adjusted EPS is expected to reach $3.37–$3.57, up 84% year over year at the midpoint.

Reflecting stronger-than-anticipated demand, Celestica raised its 2026 revenue forecast from $20.5 billion to $21 billion, implying 69% annual growth. Its adjusted EPS outlook also increased from $11.30 to $11.55, representing 91% growth. Overall, accelerating AI-related demand, favourable product mix, and operating leverage position Celestica for continued expansion.

Celestica’s growth to accelerate further in 2027

Celestica is positioned for substantial growth acceleration in 2027, led by robust demand for AI infrastructure, custom computing solutions, and networking equipment. Management projects revenue of approximately $40 billion, implying 90% growth over its 2026 outlook, compared with the anticipated 69% expansion in 2026. Adjusted operating margin is also expected to improve by 60 basis points to 9%.

The CCS segment is expected to grow rapidly, supported by strong demand across networking, compute, and storage. Meanwhile, the ATS segment is also expected to grow.

AI-related investments are likely to be a key earnings catalyst, particularly through the expansion of custom ASIC programs. Increasing adoption of customized AI accelerators, which are projected to grow significantly, further strengthens its long-term positioning.

Overall, accelerating AI infrastructure demand, expanding custom ASIC deployments, and improving margins provide a strong foundation for earnings growth. Management forecasts adjusted EPS of $21.50 for 2027, representing an 86% year-over-year increase.

Celestica stock is still a buy

Celestica’s strong Q3 performance and significantly higher 2027 outlook strengthen its investment case. With revenue expected to grow 90% in 2027 and adjusted EPS projected to increase 86%, Celestica’s growth prospects remain compelling.

For investors with a long-term horizon, Celestica is a compelling growth stock to buy and hold now.