This AI Infrastructure Stock Tripled — and Still Trades Cheaper Than It Did Before the Rally

Celestica makes AI switches, custom AI racks for AMD, and next-generation optical networking gear — and touches nearly every layer of the AI data center buildout without depending on a single product category.

From Two-Decade Slump to AI Infrastructure Standout

Celestica’s story stands apart from most AI infrastructure names because of what came before this run. The Toronto-based contract manufacturer spent nearly two decades as an unremarkable electronics manufacturing services provider, with earnings that crawled from $0.83 per share in 2021 to a business most investors simply ignored. That changed decisively as AI data center customers began routing complex networking and compute hardware programs through Celestica’s manufacturing and design capabilities — earnings reached $7.16 per share in 2025, and the stock has returned roughly 200.7% over the trailing twelve months.

What makes Celestica distinct from single-product AI infrastructure plays is the breadth of what it actually builds. The company doesn’t compete in just one category — it holds a meaningful position in AI data center switching (JPMorgan’s data puts its share at roughly 18%, trailing only Nvidia), manufactures active electrical cable and optical networking components, and has become a strategic manufacturing partner for AMD’s Helios rack-scale AI platform, built around AMD’s MI450 GPUs with global production availability targeted for late 2026.

The Product Pipeline That Extends the Growth Runway

Celestica’s recent product announcements suggest this isn’t a company riding a single technology cycle. The firm has been ramping production of 800G networking equipment for AI data center customers while simultaneously building next-generation 1.6-terabit systems for two hyperscaler customers — technology the company describes as doubling switch capacity versus its existing market-leading 800G solutions. Beyond that, Celestica has been awarded a program to design and manufacture a co-packaged optics (CPO) Ethernet switch for a hyperscaler customer, using 1.6-terabit switch silicon combined with liquid cooling technology, with production ramp targeted for 2027 — placing Celestica at the leading edge of the architecture shift toward integrated optical interconnects that the broader industry is only beginning to adopt at scale.

Management’s own commentary reinforces this multi-year framing rather than a near-term spike. The company’s Q1 2026 results specifically cited “accelerating growth” from its Connectivity & Cloud Solutions customer base, and raised its full-year 2026 outlook to reflect revenue growth of more than $6.5 billion — with management explicitly signaling that 2027 growth is now expected to exceed that pace further, driven by improved demand visibility and new program wins rather than existing contracts simply renewing.

The Valuation Paradox: Up 200%, Still Cheaper Than Before

Here is the detail that separates Celestica from much of the rest of the AI infrastructure trade: despite tripling in value over the past year, the stock trades at roughly a 50% discount to its own historical forward-earnings multiple. That combination — explosive price appreciation alongside multiple compression — is only possible when earnings estimates are rising faster than the share price, and that’s exactly what’s happened here. Analyst earnings estimates for Celestica have climbed roughly 14% for both 2026 and 2027 over just the past several months, a pace of upward revision that has kept the stock’s valuation from re-rating as aggressively as its price chart alone would suggest.

Wall Street sentiment reflects that dynamic clearly. Of 19 brokerage recommendations tracked, 16 rate the stock a Strong Buy, with average price targets in the high $400s to $475 range and some 12-month targets extending toward $679. That said, not every signal is unambiguously bullish — some analysis has flagged a near-term slowdown in sequential growth rates across Celestica’s two operating segments and cited component availability constraints as a real risk to the current growth trajectory, alongside a valuation that remains elevated relative to data center OEM peers even after accounting for the earnings growth.

Why the AMD Partnership Matters Beyond a Single Contract

Celestica’s strategic collaboration with AMD to build Helios, a rack-scale AI platform centered on AMD’s MI450 GPUs, is worth understanding as more than a single manufacturing deal. It positions Celestica as critical infrastructure for AMD’s broader push to compete with Nvidia in AI accelerator deployment — meaning Celestica’s growth isn’t purely tethered to Nvidia-centric AI infrastructure spending the way some competitors’ businesses are. If AMD gains meaningful share in AI accelerators over the coming years, Celestica captures a portion of that shift as a manufacturing partner regardless of which GPU vendor ultimately wins a larger share of hyperscaler budgets — a diversification advantage that’s easy to overlook amid the Nvidia-dominated AI infrastructure narrative.

✦ THE SCOPE — KEY TAKEAWAYS

• Celestica holds roughly 18% of the AI data center switch market, the second-largest share behind only Nvidia, in a category growing 116% in 2026.
• The stock has returned approximately 200.7% over the past year, yet trades at roughly a 50% discount to its own historical forward-earnings multiple due to rapidly rising analyst estimates.
• Revenue is projected to grow 54% in 2026 and 38% in 2027, roughly doubling from $12.4 billion in 2025 to $26.25 billion by 2027.
• A strategic manufacturing partnership with AMD on the Helios rack-scale AI platform diversifies Celestica’s growth beyond Nvidia-centric AI infrastructure spending.
• 16 of 19 covering analysts rate the stock Strong Buy, though some flag near-term sequential growth deceleration and component constraints as risks to monitor.

This content is produced by The Scope for informational purposes only and does not constitute investment advice. All investment decisions are the sole responsibility of the reader. The Scope accepts no legal liability for actions taken based on this analysis.