Celestica: Generative AI Boom Validated

Celestica Inc. (CLS) has been a beneficiary of the ongoing generative AI boom. The increased demand for ML/AI-related products is likely to trigger its accelerated top/ bottom line growth through FY2026.

[{"selector":"#anim-5de351ed-19f1-4c46-86d9-7c26115a6e01","keyframes":{"transform":["translate3d(124.72728%, 0px, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":1000,"easing":"cubic-bezier(.2, 0, .8, 1)","fill":"both"}] [{"selector":"#anim-8a0e80d4-661f-4526-a538-bcf9ecdd269e","keyframes":{"transform":["rotateZ(180deg)","rotateZ(0deg)"]},"delay":0,"duration":1000,"easing":"cubic-bezier(.2, 0, .5, 1)","fill":"forwards"}] [{"selector":"#anim-82a257ca-2837-4f81-9f91-d8778c38dd48 [data-leaf-element=\"true\"]","keyframes":{"transform":["translate(0%, 0%) scale(1.5)","translate(0%, 0%) scale(1)"]},"delay":0,"duration":2000,"easing":"cubic-bezier(.3,0,.55,1)","fill":"forwards"}] Despite the inherently lower-margin manufacturing business model, CLS has great long-term growth opportunities. This is attributed to the ramp-up in Thailand/Malaysia operations.

[{"selector":"#anim-93352765-cd8c-48db-bd39-d8de1aef923b","keyframes":{"transform":["translate3d(124.72728%, 0px, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":1000,"easing":"cubic-bezier(.2, 0, .8, 1)","fill":"both"}] [{"selector":"#anim-b1027286-9fb2-455d-b940-1d4c83091b7e","keyframes":{"transform":["rotateZ(180deg)","rotateZ(0deg)"]},"delay":0,"duration":1000,"easing":"cubic-bezier(.2, 0, .5, 1)","fill":"forwards"}] [{"selector":"#anim-74d5a412-79d9-4840-b33e-63683eb7d817 [data-leaf-element=\"true\"]","keyframes":{"transform":["translate(0%, 0%) scale(1.5)","translate(0%, 0%) scale(1)"]},"delay":0,"duration":2000,"easing":"cubic-bezier(.3,0,.55,1)","fill":"forwards"}] CLS has rallied by +27.5% since March 2024, outperforming the wider market at +1.6%. We are maintaining our Buy rating on CLS.

[{"selector":"#anim-e99c3da5-04ec-4c8d-917f-1a4caafcedbe","keyframes":{"transform":["translate3d(124.72728%, 0px, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":1000,"easing":"cubic-bezier(.2, 0, .8, 1)","fill":"both"}] [{"selector":"#anim-9bfd7d9b-4261-48f8-a03b-567bd34ba3c5","keyframes":{"transform":["rotateZ(180deg)","rotateZ(0deg)"]},"delay":0,"duration":1000,"easing":"cubic-bezier(.2, 0, .5, 1)","fill":"forwards"}] [{"selector":"#anim-01e34fe8-12ed-4977-8ffa-84099bb4956a [data-leaf-element=\"true\"]","keyframes":{"transform":["translate(0%, 0%) scale(1.5)","translate(0%, 0%) scale(1)"]},"delay":0,"duration":2000,"easing":"cubic-bezier(.3,0,.55,1)","fill":"forwards"}] Our Buy rating is supported by promising demand commentaries from Nvidia's (NVDA) and Super Micro Computer's (SMCI) recent earnings calls.

[{"selector":"#anim-5e20e591-432c-49f0-8fbc-e6446459add8","keyframes":{"transform":["translate3d(124.72728%, 0px, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":1000,"easing":"cubic-bezier(.2, 0, .8, 1)","fill":"both"}] [{"selector":"#anim-731c1a59-1ee2-4696-99a6-2ea5e6597f6b","keyframes":{"transform":["rotateZ(180deg)","rotateZ(0deg)"]},"delay":0,"duration":1000,"easing":"cubic-bezier(.2, 0, .5, 1)","fill":"forwards"}] [{"selector":"#anim-f33d6a6a-230d-4d09-9256-a54951a639cb [data-leaf-element=\"true\"]","keyframes":{"transform":["translate(0%, 0%) scale(1.5)","translate(0%, 0%) scale(1)"]},"delay":0,"duration":2000,"easing":"cubic-bezier(.3,0,.55,1)","fill":"forwards"}] CLS management's promising FQ2'24 guidance is another factor supporting our Buy rating.

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[{"selector":"#anim-f033acc1-3f13-4f86-acff-966e97643e09","keyframes":{"transform":["translate3d(124.72728%, 0px, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":1000,"easing":"cubic-bezier(.2, 0, .8, 1)","fill":"both"}] [{"selector":"#anim-db3c5e27-37fd-481d-bb11-05e141b26a39","keyframes":{"transform":["rotateZ(180deg)","rotateZ(0deg)"]},"delay":0,"duration":1000,"easing":"cubic-bezier(.2, 0, .5, 1)","fill":"forwards"}] [{"selector":"#anim-4eae7736-8a46-49f6-acc3-17c220011f0b [data-leaf-element=\"true\"]","keyframes":{"transform":["translate(0%, 0%) scale(1.5)","translate(0%, 0%) scale(1)"]},"delay":0,"duration":2000,"easing":"cubic-bezier(.3,0,.55,1)","fill":"forwards"}] CLS Q1'24 Earnings Beat: Strong Revenue & Profit Growth

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