Celestica (CLS 5.45%) has become an increasingly favored investment by smart money, with $6.32 billion in institutional inflows and $4.28 billion in institutional outflows over the last 12 months. Large funds, including Viking Global Investors, Divisadero Street, Balyasny , and Lazard, have dramatically increased their stakes in the stock in the third quarter of 2025.
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Here's why smart money seems to like this stock.
Growth catalysts
Celestica designs, engineers, and manufactures high-performance networking solutions, including switches and interconnects, custom artificial intelligence (AI) servers, advanced cooling solutions, and fully integrated rack-scale systems for hyperscale data centers.
NYSE: CLS
Key Data Points
In the third quarter of 2025, Celestica's revenue surged by 28% year over year to $3.19 billion, while adjusted earnings per share (EPS) soared 52% year over year to $1.58. Management has raised its full-year 2025 revenue guidance from $11.55 billion to $12.2 billion, and adjusted EPS outlook from $5.50 to $5.90. The company has also guided for $16 billion in revenue in 2026, 31% year-over-year growth based on 2025 revenue guidance.
Celestica is benefiting from increased demand for high-performance technology hardware, as hyperscalers transition from 400G switches to 800G switches to ensure higher bandwidth and lower latency in large AI clusters. The company currently holds over a 50% share in the Ethernet switch market. Demand for Celestica's application-specific integrated circuit (ASIC)-based AI compute systems is also strong. A major hyperscaler is ramping up its next-generation custom compute program.
The company also has exceptional future revenue visibility, with confirmed demand from hyperscalers spanning 12 to 15 months. Celestica expects to benefit from the 1.6T networking upgrade cycle at hyperscalers and increasing demand for its custom ASIC compute systems in 2027. It is also planning to commence mass production of its rack-scale custom AI system for a digital-native customer in 2027. This engagement can potentially add "multiple billions of dollars" in revenue by 2027.
With robust near-term demand and impressive multiyear revenue visibility, Celestica can prove to be an attractive AI infrastructure stock in the coming months.
