Core Insights - Celestica Inc. (CLS) and AST SpaceMobile, Inc. (ASTS) are significant players in the technology sector, with Celestica specializing in electronics manufacturing services and AST SpaceMobile focusing on space-based cellular broadband networks [1][2] Group 1: Celestica Inc. (CLS) - Celestica has over two decades of manufacturing experience and offers cloud-optimized data storage and networking solutions, driven by the demand for AI-based applications [4] - The company is diversifying its product offerings and expanding into high-value markets, which enhances business resilience by reducing dependence on a single industry [5] - Despite its strengths, Celestica faces margin pressures due to high research and development costs and stiff competition from industry giants like Foxconn and Flex [6] - Celestica's sales and EPS are expected to grow by 20.6% and 43% year-over-year in 2025, respectively, with a positive trend in EPS estimates [12] - The company has experienced a remarkable stock performance, gaining 424% over the past year, significantly outperforming the sector's growth of 30.1% [15][18] - Celestica's valuation metrics are more attractive, with a price/sales ratio of 2.13 compared to AST SpaceMobile's 69.34 [16] Group 2: AST SpaceMobile, Inc. (ASTS) - AST SpaceMobile is developing the first global cellular broadband network in space, utilizing a constellation of satellites to provide service directly to smartphones [2][10] - The company has launched five commercial satellites, with plans to deploy 45 to 60 more by Q1 2026, aiming to enhance cellular coverage in areas lacking terrestrial networks [7][10] - AST SpaceMobile's sales are projected to grow by an extraordinary 1,120% in 2025, but its EPS is expected to decline by 48.5% [12] - The company faces challenges from unfavorable macroeconomic conditions and competition from established players like SpaceX's Starlink, which may pressure its financial performance [11] - AST SpaceMobile's stock has gained 29.8% over the past year, but this is significantly lower than Celestica's performance [15]

Core Viewpoint - Celestica Inc. will announce its third quarter 2025 financial results and host an Investor and Analyst Day on October 28, 2025, providing updates on business operations and financial outlook [1] Group 1: Financial Results and Conference Call - The financial results will be released after market close on October 27, 2025 [1] - The conference call will start at 8:00am ET on October 28, 2025 [1] - Management will discuss strategic priorities and growth opportunities during the call [1] Group 2: Investor and Analyst Day - Following the conference call, Celestica will host a Lunch Forum for investors and analysts in Midtown Manhattan, New York City [3] - A panel of management will be available to answer questions from institutional investors [3] - Attendance is limited and subject to availability [3] Group 3: Webcast Information - Participants can join a live webcast of the conference call [2] - A recorded version of the webcast will be available approximately two hours after the call [2] - The recorded webcast can be accessed via Celestica's website [2] Group 4: Attendance Registration - Institutional investors and research analysts interested in attending are invited to express their interest [4] - Contact information for Celestica Investor Relations is provided for inquiries [4]

Company Performance - Celestica's stock closed at $246.42, reflecting a decrease of -2.61% from the previous day's closing price, underperforming the S&P 500 which gained 0.85% [1] - Over the past month, Celestica's shares have increased by 23.9%, significantly outperforming the Computer and Technology sector's gain of 4.39% and the S&P 500's gain of 2.38% [2] Financial Expectations - Analysts anticipate Celestica will report earnings of $1.45 per share, representing a year-over-year growth of 39.42%. Revenue is expected to reach $3 billion, indicating a 19.99% increase compared to the same quarter last year [3] - For the full year, earnings are projected at $5.55 per share and revenue at $11.63 billion, reflecting increases of +43.04% and +20.61% respectively from the previous year [4] Analyst Sentiment - Recent revisions in analyst estimates are crucial as they often indicate near-term business trends, with positive changes suggesting optimism regarding Celestica's business and profitability [4][5] - Celestica currently holds a Zacks Rank of 1 (Strong Buy), which has historically delivered an average annual return of +25% since 1988 [6] Valuation Metrics - Celestica is trading with a Forward P/E ratio of 45.59, which is a premium compared to the industry average Forward P/E of 20.08 [7] - The Electronics - Manufacturing Services industry, to which Celestica belongs, ranks 9th in the Zacks Industry Rank, placing it in the top 4% of over 250 industries [7][8]

Group 1 - The Carillon Scout Mid Cap Fund's second quarter 2025 investor letter highlights the positive performance of the Russell Midcap Index despite a sell-off in early April due to tariff announcements, with delays in tariff collection allowing for better negotiations among trading partners [1] - Celestica Inc. (NYSE:CLS) is emphasized as a key holding, reporting a one-month return of 14.35% and a remarkable 461.23% increase in value over the past 52 weeks, with a market capitalization of $28.194 billion as of September 09, 2025 [2][3] - The company specializes in contract manufacturing for data center hardware, aerospace, defense, and industrial parts, driven by strong demand for networking switches, particularly 400-gigabyte and 800-gigabyte switches, indicating potential for earnings upside as new deals are expected to be won [3] Group 2 - Celestica Inc. reported revenue of $2.89 billion for Q2 2025, marking a 21% increase from Q2 2024, exceeding guidance expectations, although it is noted that certain AI stocks may present greater upside potential with less downside risk [4]

Group 1 - Celestica, Inc. is focusing on strengthening its global supply chain network to mitigate supply chain disruptions and procurement delays caused by geopolitical unrest [1][7] - The company is expanding its manufacturing capacity in the United States, Thailand, and Malaysia to meet the growing demand for AI data center products [2][7] - Celestica's robust inventory management and operational flexibility have minimized the impact of geopolitical conflicts on its supply chain [3] Group 2 - Celestica faces competition from Jabil, Inc. and Flex Ltd., both of which are also enhancing their supply chain resilience through localized manufacturing [4][5] - Jabil is investing $500 million in the Southeast U.S. to strengthen its position in the AI hardware supply chain [4] - Flex operates over 49 million square feet globally, focusing on localized manufacturing to enhance supply chain resilience [5] Group 3 - Celestica's stock has increased by 461.8% over the past year, significantly outperforming the industry growth of 157.5% [6][7] - The company trades at a forward price-to-earnings ratio of 38.33, which is higher than the industry average [9] - The Zacks Consensus Estimate for Celestica's earnings for 2025 has risen by 9.9% in the past 60 days [11]

Core Insights - Celestica, Inc. (CLS) shares have surged 139% in the past six months, outperforming the Electronics - Manufacturing Services industry growth of 64.9% and the Zacks Computer & Technology sector as well as the S&P 500 during the same period [1][8] - The company has outperformed peers such as Jabil, Inc. (JBL) and Sanmina Corporation (SANM), whose shares have risen 45.1% and 54.2%, respectively [2][8] Growth Drivers - Celestica's growth is driven by strong demand in the Connectivity & Cloud Solutions segment, particularly in its Hardware Platform Solutions business, with a transition from 400G to 800G switches accelerating revenue growth [3][8] - The company is capitalizing on AI investments, which are driving demand for its data center interconnects, edge solutions, and servers and storage-related products [3][8] - Strategic collaborations with Broadcom and AMD are enhancing Celestica's product offerings, such as the DS4100 switch and SC6100 storage controller, positioning the company competitively against peers [4][8] Financial Management - Celestica demonstrates strong capital discipline, with capital expenditure at 1.1% of revenues in Q2, below the projected range of 1.5-2% [5][8] - The company is focusing on higher utilization of manufacturing facilities, with only 40 basis points of capex allocated to maintenance, indicating a strong emphasis on growth programs [5][8] - Inventory balance increased to $1.92 billion in Q2 from $130 million in Q1, with cash cycle days improving to 66 days from 69 days, suggesting anticipation of strong demand [6][8] Supply Chain Resilience - Celestica operates in 16 countries, benefiting from a diversified manufacturing network that mitigates geopolitical and tariff-related uncertainties [9][8] - Investments in expanding capacity and capabilities in the U.S., Thailand, and Malaysia, along with design centers in India and the U.S., have minimized supply chain disruptions [9][8] Earnings Estimates - Earnings estimates for Celestica for 2025 and 2026 have increased over the past 60 days, indicating positive market sentiment [10][8] Valuation Metrics - Celestica's shares are currently trading at a premium with a price/earnings ratio of 33.33 compared to the industry average of 21.56 [11][8] Long-term Outlook - The company's diverse manufacturing strategy and efficient capital management are expected to support long-term growth, particularly in the CCS segment driven by AI applications [12][8]

Core Insights - Celestica (NYSE: CLS) stock has seen a significant increase of approximately 344% since the initiation of bullish coverage in March 2024 [1] Group 1: Company Performance - The stock performance of Celestica has been highlighted as one of the top picks, indicating strong investor interest and confidence in the company's future prospects [1] Group 2: Investment Strategy - The investment group Beyond the Wall Investing offers features such as a fundamentals-based portfolio, weekly analysis from institutional investors, and alerts for short-term trade ideas based on technical signals [1]

Group 1 - The core investment thesis for Celestica (CLS) focuses on the company's shift from traditional contract manufacturing to Original Design Manufacturer (ODM) [1] - The author has a background in engineering and a strong interest in technology stocks, which influences the investment perspective [1] Group 2 - No stock or derivative positions in any mentioned companies are held by the author, and there are no plans to initiate such positions in the near future [1]

Investment Rating - The report maintains a "Positive" investment rating for the communication equipment industry [15]. Core Insights - Major cloud vendors such as Google, Amazon, Microsoft, and Meta reported better-than-expected financial results, driven by strong demand for cloud services and advertising, with significant capital expenditure increases [4][7]. - AI applications are deeply penetrating various sectors, leading to accelerated investments in computing power and infrastructure [7][13]. - The overall trend indicates a robust growth trajectory for AI and computing power, with companies ramping up their capital expenditures to support this growth [13]. Summary by Sections Cloud Vendors: Strong Financial Performance and Demand - Google reported Q2 2025 revenues of $96.43 billion, up 13.8% year-on-year, with a net profit of $28.20 billion, up 19.4% [24][26]. - Amazon achieved Q2 2025 revenues of $167.70 billion, a 13.3% increase year-on-year, with a net profit of $18.16 billion, up 34.7% [34][36]. - Microsoft recorded Q4 FY25 revenues of $76.44 billion, an 18.1% increase year-on-year, with a net profit of $27.23 billion, up 23.6% [43][45]. - Meta's Q2 2025 revenues reached $47.52 billion, a 21.6% increase year-on-year, with a net profit of $18.34 billion, up 36.2% [51][54]. CPU/GPU: Product Iteration and Ecosystem Upgrade - AMD's Q2 2025 revenues were $7.69 billion, a 31.7% increase year-on-year, with a net profit of $0.87 billion, up 229.1% [60][62]. - The client and gaming segments saw record growth, while the data center business faced challenges due to export restrictions [62]. Switches: High-End Volume and Stable Profitability - Arista's revenue growth was driven by its AI Center strategy, with significant increases in AI network revenue [9]. - Celestica's communication market growth was primarily driven by high-performance switches, with revenue and performance outlooks adjusted upwards [9]. Optical Communication & Fiber Optics: Strong Shipments and Scale-Up Acceleration - Lumentum's optical module shipments surged, and coherent optical communication business saw rapid growth [10]. - Corning's optical communication business thrived, driven by enterprise networks, with expectations for significant future growth from scale-up scenarios [10]. Cables: Strong Orders and Active Capacity Expansion - Amphenol reported strong AI-related orders and exceeded expectations in IT data communication business growth [11]. Cooling: High Demand and Accelerated Liquid Cooling Adoption - Vertiv's revenue and profits saw significant growth, with a strong order backlog and upward guidance for the year [12]. Investment Recommendations: Accelerating Business Flywheel and Computing Power - The report recommends several companies across different segments, including optical modules, liquid cooling, fiber optics, and AI applications, highlighting their potential for growth [13].

Industry Overview - The electronics manufacturing services (EMS) industry provides design, engineering, and manufacturing services to electronics original equipment manufacturers (OEMs) and is currently ranked in the top 4% of the Zacks Industry Rank [1] - The industry has delivered a remarkable 102.8% return over the past year and a 48.7% year-to-date return, indicating strong performance and potential for continued outperformance in the next three to six months [2] Company Analysis: Celestica Inc. (CLS) - Celestica Inc. is a leading global EMS provider, offering a wide range of manufacturing and supply-chain solutions tailored to various customer needs [6] - The company is experiencing strong demand in the Connectivity & Cloud Solutions segment, particularly in its Hyperscaler Portfolio Solutions networking business and optical programs [7] - Celestica is well-positioned in the AI infrastructure market, projected to reach $223.45 billion by 2030, with a compound annual growth rate of 30.4% from 2024 to 2030 [8] - For 2025, the Zacks Consensus Estimate indicates revenues of $11.63 billion (up 20.6% year over year) and earnings per share of $5.55 (up 43% year over year) [11] - The short-term average price target for CLS shares suggests a potential increase of 13.3% from the last closing price of $181.34, with a maximum upside of 35.1% [13] Company Analysis: Jabil Inc. (JBL) - Jabil Inc. is a major global supplier of EMS solutions, providing design, production, product management, and after-market services across various industries [14] - The company is benefiting from strong momentum in capital equipment, AI-powered data center infrastructure, cloud, and digital commerce sectors [15] - Jabil plans to invest $500 million to enhance its manufacturing capabilities for the AI data center vertical, strengthening its position in the AI hardware supply chain [17] - For fiscal 2026, the Zacks Consensus Estimate shows revenues of $30.93 billion (up 6.1% year over year) and earnings per share of $11.05 (up 17.8% year over year) [22] - The short-term average price target for JBL shares indicates a potential increase of 14.5% from the last closing price of $204.05, with a maximum upside of 24.9% [23]