Celestica (TSX: CLS): Canada’s Fastest‑Growing AI Stock and Why It’s a Top Buy in 2025

Celestica’s Transformation into a Tech Powerhouse

Celestica, once known primarily as an electronics manufacturing services (EMS) provider, has successfully repositioned itself as a design, manufacturing, and supply chain solutions leader. Its focus on AI-driven data center hardware, cloud infrastructure, and advanced technology solutions has allowed it to capture demand from hyperscalers and enterprise clients. In Q2 2025, Celestica reported revenue of $2.89 billion, up 21% year-over-year, with net income more than doubling to $211 million.

This transformation mirrors the trajectory of U.S. companies like NVIDIA (NASDAQ: NVDA), which evolved from a graphics card maker into a dominant AI infrastructure provider. While Celestica is not designing chips, its role in building AI-ready networking switches and hardware platforms positions it as a critical enabler of the AI revolution.

Financial Strength and Momentum

Celestica’s financial performance has been nothing short of remarkable. Its earnings per share (EPS) surged to $1.82 in Q2 2025, compared to $0.80 a year earlier, reflecting both revenue growth and margin expansion. Operating margins improved to 9.4% from 5.6%, demonstrating the company’s ability to scale profitably.

For comparison, Canadian tech peer Converge Technology Solutions (TSX: CTS) has struggled with profitability despite revenue growth, while Celestica has consistently beaten analyst expectations. Similarly, U.S.-based Flex Ltd. (NASDAQ: FLEX), another EMS competitor, has delivered steady results, but Celestica’s growth trajectory has been far steeper, making it a standout in the sector.

Riding the AI and Cloud Infrastructure Boom

The global AI and cloud infrastructure market is expanding rapidly, and Celestica is directly benefiting. The company recently launched high-bandwidth AI data center switches (DS6000 and DS6001), designed for machine learning and hyperscale applications. These products align Celestica with the same secular tailwinds driving NVIDIA, AMD, and Broadcom to record valuations.

In Canada, few companies are as directly exposed to AI infrastructure. While Shopify (TSX: SHOP) is Canada’s most recognized tech name, its growth is tied to e-commerce. Celestica, by contrast, is embedded in the physical backbone of AI and cloud computing, giving it a unique and defensible position in the market.

Share Price Performance and Market Confidence

Celestica’s stock has been one of the best-performing equities on the TSX, climbing from under $80 in late 2024 to nearly $390 per share in October 2025. Analysts remain bullish, with multiple firms raising price targets after the company consistently exceeded earnings expectations.

This performance dwarfs many Canadian peers. For instance, BlackBerry (TSX: BB) has attempted to reinvent itself in cybersecurity and automotive software but has failed to deliver consistent returns. Celestica, on the other hand, has combined reinvention with execution, rewarding long-term shareholders with multi-bagger gains.

Comparing Celestica to Canadian and U.S. Peers

When comparing Celestica to other Canadian companies, its growth profile stands out. OpenText (TSX: OTEX), a leader in enterprise software, has delivered steady but modest returns, while Celestica has surged on the back of AI-driven demand. Similarly, Magna International (TSX: MG), Canada’s automotive parts giant, remains cyclical and tied to global auto demand, whereas Celestica is aligned with secular technology trends.

Against U.S. peers, Celestica’s valuation still looks attractive. While NVIDIA trades at a forward P/E above 40, Celestica’s forward earnings multiple is significantly lower, despite its rapid growth. This suggests that investors may still be undervaluing Celestica’s role in the AI supply chain.

Risks and Considerations

No investment is without risks. Celestica’s rapid rise has led to concerns about valuation, with some analysts cautioning that execution missteps could trigger volatility. Additionally, as a hardware-focused company, Celestica is exposed to supply chain disruptions and cyclical demand shifts.

However, the company’s diversified customer base, strong balance sheet, and expanding product portfolio mitigate these risks. Unlike smaller Canadian tech firms that rely heavily on a single product or market, Celestica has established itself as a global player with multiple growth levers.

Why Celestica is a Great Investment Today

Celestica represents a rare Canadian opportunity to invest in a company that is both globally competitive and directly tied to the AI megatrend. Its financial results demonstrate consistent execution, while its product launches show a clear strategy to capture future demand. Compared to Canadian peers like Shopify, OpenText, and Converge, Celestica offers higher growth with stronger profitability. Against U.S. peers like Flex and Jabil, it is delivering faster momentum with a more attractive valuation.

For Canadian investors seeking exposure to AI and cloud infrastructure without paying U.S. mega-cap premiums, Celestica is a compelling choice. Its combination of explosive growth, improving margins, and strategic positioning makes it one of the most exciting TSX-listed companies heading into 2026.