Celestica Stock Soars 16% After Stellar Earnings Report

UPDATE: Celestica Inc. (TSX:CLS) has just reported a staggering 16% surge in stock prices following its remarkable second-quarter earnings announcement, confirming the company’s ongoing growth amid the booming artificial intelligence (AI) sector.

The latest earnings figures reveal a substantial $2.89 billion in revenue, reflecting a 21% increase year-over-year. This surge in financial performance comes as Celestica capitalizes on the thriving demand for its Connectivity and Cloud Solutions (CCS), particularly bolstered by its Hardware Platform Solutions (HPS) division, which alone generated an impressive $1.2 billion in revenue during Q2, soaring 82% year-over-year.

With adjusted earnings per share (EPS) also on the rise, hitting $1.39—a 54% increase compared to the previous year—investors are left wondering if this stock is still a smart buy. The current price-to-earnings (P/E) ratio stands at 32.1, higher than the sector average, prompting cautious optimism about the stock’s future valuation.

Celestica’s success is largely attributed to its strategic focus on high-growth sectors. The company’s HPS business, which now accounts for 43% of total sales, is seeing robust demand from hyperscaler customers who are heavily investing in data center expansions. This trend indicates continued demand for Celestica’s advanced networking products, making it a key player in the evolving tech landscape.

Moreover, the Advanced Technology Solutions (ATS) segment, which includes markets such as Aerospace and Defence, reported $819 million in revenue, a 7% increase from the previous year, driven by recovering industrial demand.

As Celestica’s stock continues to climb—more than doubling in 2025 and skyrocketing 1,817% over the past three years—investors are left to ponder the risks associated with its elevated valuation. However, the company is expected to maintain a projected earnings growth rate of 39% in 2025, suggesting that the premium may be justified.

Given the strong growth prospects and improved profitability, many analysts remain bullish on Celestica, deeming it a compelling investment. The company is ramping up production for several 800G networking programs, indicating that its communications end market will be a critical growth driver in the coming quarters.

What’s Next: As Celestica continues to innovate and expand its market reach, investors should closely monitor upcoming announcements and earnings reports to gauge the sustainability of this growth momentum. The tech industry remains volatile, but Celestica’s strategic positioning suggests it could maintain its upward trajectory.

Stay tuned for further updates on Celestica as the market reacts to these developments.