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.

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.

CLS has rallied by +27.5% since March 2024, outperforming the wider market at +1.6%. We are maintaining our Buy rating on CLS.

Our Buy rating is supported by promising demand commentaries from Nvidia's (NVDA) and Super Micro Computer's (SMCI) recent earnings calls.

CLS management's promising FQ2'24 guidance is another factor supporting our Buy rating.

The guidance of growth acceleration on a YoY basis in the coming quarters is a positive sign for CLS.

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