Celestica Stock Climbs 8% as AI Data Center Boom Drives 83% Revenue Surge and $40 Billion 2027 Sales Outlook

Celestica Inc. shares rose more than 8% on Tuesday. The electronics manufacturer reported an 83% jump in quarterly revenue and set an ambitious target to nearly double sales next year, driven by surging demand for artificial intelligence data center equipment.

Celestica shares gained $20.29, or 8.24%, to $266.54 in early trading on the New York Stock Exchange. More than 1.1 million shares had changed hands shortly after the open, and the company's market value rose to about $34.4 billion.

The stock is down about 24% over the past 52 weeks.

Third-quarter results

For the third quarter, the Toronto-based company reported:

Revenue of $5.83 billion, up 83% from $3.19 billion a year earlier and above its own guidance range of $5.25 billion to $5.55 billion Adjusted earnings of $3.30 a share, up from $1.58 and above its guidance of $2.88 to $3.08 An adjusted operating margin of 8.5%, up from 7.6%

On a GAAP basis, earnings were $3.26 a share, up from $2.31.

"Our adjusted operating margin of 8.5% represents another new high for the company," Chair and Chief Executive Rob Mionis said.

AI infrastructure drives growth

Growth was concentrated in Celestica's Connectivity & Cloud Solutions segment, which makes networking switches, servers and other equipment for large data center operators:

Connectivity & Cloud Solutions: Revenue more than doubled, up 102% to $4.87 billion, with a segment margin of 8.9%. Hardware Platform Solutions: Revenue within the segment rose about 70% to roughly $2.3 billion. Advanced Technology Solutions: Revenue, which includes aerospace, defense, industrial and health care products, rose 23% to $960 million, with a margin of 6.6%.

Celestica builds hardware for hyperscalers, the largest cloud computing companies, which have been spending heavily to expand capacity for AI.

Raised outlook

Celestica raised its full-year 2026 forecast:

Revenue to $21 billion, from $20.5 billion Adjusted earnings to $11.55 a share, from $11.30

For the fourth quarter, it forecast revenue of $6.275 billion to $6.575 billion and adjusted earnings of $3.37 to $3.57 a share.

The company lowered its 2026 free cash flow forecast to $460 million from $600 million. It said it is investing in working capital to support growth in 2027.

Doubling down on 2027

Celestica also gave its first outlook for 2027, projecting:

Revenue of $40 billion, up about 90% from this year's forecast Adjusted earnings of $21.50 a share An adjusted operating margin of 9% Capital spending of $1.5 billion to $2 billion

"The demand environment continues to be very robust, supporting our 2027 revenue outlook," Mionis said.

The company presented its results alongside its 2026 Investor and Analyst Day on Tuesday morning.

Funding and buybacks

In August, Celestica completed a public offering of 11.1 million shares, raising $3.45 billion in gross proceeds. It also said it plans a new share buyback program in the fourth quarter, after its current program expires on Nov. 2, to repurchase up to 2.5% of its public float, subject to approval by the Toronto Stock Exchange.

Volatile year

Celestica's shares have been volatile this year as investors swing between enthusiasm about AI spending and worries that the boom could fade. Concerns about the cost and financing of AI infrastructure weighed on technology stocks last week, before a rebound this week.

Wall Street rallied on Monday after Anthropic, the developer of the Claude AI models, filed for an initial public offering, and Meta Platforms announced plans to raise up to $95 billion to fund AI expansion.

What's next

Investors will look for confirmation of continued strength in AI spending when Alphabet, Microsoft, Amazon and Meta report quarterly results this week. Their capital expenditure plans directly affect demand for the data center equipment Celestica builds.

Analysts will also watch whether Celestica can scale its operations to meet its $40 billion target without sacrificing margins, and how it manages the heavy capital spending needed to support that growth.

_This article is for information only and does not constitute financial advice._