Group 1: Canadian Tech Sector - Celestica Inc. shares fell 12.92% due to "AI skepticism," impacting the overall index negatively [1] Group 2: Canadian Cannabis Companies - Tilray Brands Inc. shares increased by 44.35%, Canopy Growth Corp. shares rose by 52.87%, Aurora Cannabis Inc. shares were up 19.04%, and Organigram Global Inc. shares increased by 16.81% following reports of potential easing of federal restrictions on cannabis by U.S. President Donald Trump [2] - The aggressive legalization in the U.S. could revitalize Canadian cannabis stocks, which had previously seen significant declines [2] Group 3: Canadian Economic Indicators - Investors are anticipating November inflation data, with a consensus forecast of 2.3% headline inflation, which will provide insights into the Canadian economy's health [3] - The Bank of Canada policy rate is currently at 2.25% [3] Group 4: U.S. Market Performance - Broadcom's shares dropped 11.4% despite reporting stronger-than-expected profits, contributing to market concerns about the AI sector [4] - Oracle's shares fell nearly 11% after reporting better-than-expected profits, raising fears about high valuations in the AI market [5] - The S&P 500 index was notably affected by declines in Broadcom and Nvidia, with Oracle's results causing disappointment among investors [5] Group 5: Market Indices and Commodities - The Dow Jones industrial average decreased by 245.96 points, the S&P 500 index fell by 73.59 points, and the Nasdaq composite dropped by 398.69 points [6] - The Canadian dollar traded at 72.63 cents US, and crude oil prices fell by 16 cents to US$57.44 per barrel, while gold prices increased by US$15.30 to US$4,328.30 per ounce [6]

Industry Overview - The electronics manufacturing services (EMS) industry is rapidly evolving and is expected to grow at a compound annual growth rate (CAGR) of 6.06% due to factors such as digital transformation, AI data center expansion, consumer electronics, IoT markets, 5G adoption, and automotive innovation [1] Company Profiles Sanmina Corporation - Sanmina is a global provider of electronics contract manufacturing services, focusing on engineering and fabricating complex components and offering complete end-to-end supply chain solutions [2] - The company emphasizes strengthening technology leadership and a customer-focused approach as key elements of its long-term growth strategy [4] - Sanmina's comprehensive portfolio includes product design, manufacturing, assembly, testing, and aftermarket support, allowing customers to rely on a single partner throughout the product lifecycle [5] - The company has a strong liquidity position, with a current ratio of 1.72 and a debt-to-capital ratio of 10.6%, which is significantly lower than the EMS industry average of 37.9% [8][15] Celestica Inc. - Celestica primarily serves original equipment manufacturers and cloud-based service providers, offering a wide range of manufacturing and supply-chain solutions [3] - The company is experiencing strong growth in the AI data center market, with a 43.2% year-over-year sales increase in the Connectivity & Cloud Solutions segment [11][12] - However, Celestica's Advanced Technology segment saw a decline of 4.1% year-over-year, primarily due to elevated inventory levels in industrial end markets [13] - Celestica's current ratio is 1.47, indicating it is well-positioned to meet short-term obligations, but its quick ratio of 0.88 suggests potential challenges in fulfilling these obligations without selling inventory [15] Financial Performance - In the third quarter, Sanmina generated $1.247 billion in revenues from Industrial & Energy, Medical, Defense & Aerospace, and Automotive markets, a slight decrease from $1.253 billion [7] - Celestica generated $126.2 million in cash from operations, up from $122.8 million year-over-year, with free cash flow increasing by 15.7% [14] - Sanmina's full-year sales are expected to grow by 72.24%, while Celestica's sales are projected to grow by 26.34% [16][18] Market Position and Valuation - Over the past year, Celestica's share price has increased by 280.1%, while Sanmina's has risen by 105% [18] - From a valuation perspective, Sanmina appears more attractive, trading at a price/earnings ratio of 16.45 compared to Celestica's 42.36 [19] - Both companies hold a Zacks Rank 1 (Strong Buy), indicating strong demand across multiple verticals and resilience amid macroeconomic challenges [21]

Company Overview - Celestica Inc. is a Canadian electronics manufacturing services (EMS) leader, providing end-to-end design, manufacturing, and supply chain solutions for OEMs across various sectors including aerospace, defense, healthtech, industrial, communications, and enterprise markets [2] - The company operates through two primary segments: Advanced Technology Solutions (ATS) and Connectivity & Cloud Solutions (CCS) [2] Financial Performance - In 2024, Celestica achieved $9.6 billion in revenue, with CCS driving 30% growth to $6.5 billion, while ATS contributed $3.1 billion with 5–6% growth [3] - The company maintains steady margins, with a gross margin of 10.72%, operating margin of 4.8%, and net income margin of 4.44% [3] - Celestica generated strong free cash flow of $303 million and has a return on equity of 22.5% [3] Industry Trends - Key industry trends such as digital transformation, cloud computing expansion, IoT proliferation, advancements in AI, 5G, and robotics, as well as reshoring and supply chain resilience align with Celestica's strengths [4] - The company's global footprint and diversified capabilities position it well to capitalize on these trends [4] Investment Case - Despite potential headwinds from cyclical demand, pricing pressures, and geopolitical uncertainties, Celestica's robust fundamentals and diversified portfolio create a compelling investment case [5] - The company is seen as a critical player in the EMS sector, offering steady growth, solid cash generation, and strategic exposure to the evolving electronics landscape [5] - The bullish thesis on Celestica emphasizes segment-level performance and exposure to high-growth markets [6]

Core Insights - Celestica Inc. (CLS) has experienced a significant stock price increase of 259.6% over the past year, outperforming the industry growth of 112.5% and competitors like Flex Ltd. (63.5%) and Jabil Inc. (63.9%) [1][6] Group 1: AI and Product Development - The company is benefiting from the generative AI boom, driven by strong demand for AI/ML compute and networking products from hyperscale customers [2] - To leverage this trend, Celestica is expanding its offerings through innovation, including the launch of the SD6300 ultra-dense storage expansion system, designed to accommodate the growing AI data needs [3] - Additionally, Celestica introduced two new 1.6TbE data center switches, the DS6000 and DS6001, which enhance switching capacity for AI/ML applications [4] Group 2: Financial Outlook and Guidance - Celestica raised its 2025 revenue forecast to approximately $12.2 billion, up from $11.55 billion, and adjusted EPS to $5.90 from $5.50, reflecting robust demand for networking products [6][13] - Earnings estimates for 2025 have increased by 33.2% to $5.90, while 2026 estimates improved by 41.8% to $8.21, indicating positive sentiment regarding the company's growth potential [9] Group 3: Market Position and Customer Base - The company's focus on product diversification and R&D has strengthened its market position, allowing it to serve a wide range of industries including communication, healthcare, aerospace, and energy [7][8] - A diverse customer base enhances business resilience, reducing dependence on any single industry and mitigating financial impacts from sector-specific downturns [8] Group 4: Production and Earnings Performance - As production volumes increase and costs decrease, the adoption of Celestica's products is expected to rise across various industries, including automotive and telecommunications [14] - The company has a trailing four-quarter average earnings surprise of 6.9%, indicating strong performance and a favorable outlook for stock price appreciation [14][15]

Core Insights - Alphabet Inc. (GOOGL) has significantly improved its position in the AI sector, overtaking competitors like OpenAI and Tesla, and is now seen as a leading player in the industry [5][6] - The launch of Gemini 3, an advanced AI model trained on Google's proprietary TPU chips, has garnered positive reviews and is expected to enhance Alphabet's competitive edge [3][6] - Recent regulatory developments, including a favorable antitrust ruling, have bolstered investor confidence in GOOGL, leading to a notable increase in its stock price [4][5] Alphabet's AI Advancements - Waymo's expansion into more cities and its claims of safer autonomous vehicles are positioning it ahead of competitors like Tesla's RoboTaxi [2] - The successful release of Gemini 3, which outperformed OpenAI's latest model, marks a significant milestone for Alphabet in the AI landscape [3] - The company has shifted from being perceived as a laggard to a leader in AI, challenging OpenAI and reshaping the ecosystem [5] Financial Implications for Partners - TTM Technologies and Celestica are expected to benefit from Alphabet's AI growth, supplying specialized PCBs and server infrastructure for Google's AI data centers [6] - Broadcom, as Google's exclusive TPU chip fabrication partner, is directly tied to the success of Gemini, with its shares up over 60% year-to-date [10] - TTM Technologies has seen its stock soar nearly 170% this year, driven by strong demand for advanced PCBs tailored for Google's TPU chips [12] - Celestica's shares have increased over 220% year-to-date, supported by its role in manufacturing server racks for Google's AI infrastructure [15]

Core Viewpoint - The AI bull market is experiencing a resurgence, with new stocks leading the rally instead of traditional giants like NVIDIA and Microsoft [1][2]. Group 1: Alphabet Inc. - Alphabet Inc. (NASDAQ: GOOG) is positioned as a leader in the AI race, with a market cap of $3.8 trillion and significant advancements in AI technology, including the Gemini V3 upgrade and Waymo's driverless car service [3]. - Analysts from JP Morgan and Scotiabank have raised their price targets for Alphabet to $336 and $340, respectively, reflecting strong earnings performance in 2025 [3]. - Despite a recent four-day decline, GOOG shares show strong upside potential, trading above the 50-day and 200-day simple moving averages (SMAs) since July [6]. Group 2: TTM Technologies Inc. - TTM Technologies (NASDAQ: TTMI) is a key player in the AI sector, focusing on high-density printed circuit boards (PCBs) essential for AI systems, with a market cap nearing $7 billion and $2.7 billion in sales over the last year [7]. - The company reported a 22% year-over-year increase in quarterly revenue, driven by AI data center sales, and has a backlog in aerospace and defense approaching $1.5 billion [7]. - TTMI shares have surged nearly 170% year-to-date, with strong technical indicators suggesting continued upward momentum [9]. Group 3: Celestica Inc. - Celestica (NYSE: CLS) has seen significant growth due to demand for its products in AI data centers, achieving record quarterly EPS of $1.58 and revenue of $3.16 billion in Q3 2025 [10]. - The company's market cap has reached $35 billion, with annual sales projected to exceed $11 billion, and Citigroup has upgraded the stock to Buy with a price target of $375 [10]. - CLS shares are above both the 50-day and 200-day SMAs, indicating a strong uptrend, although recent momentum has shown signs of weakening [12]. Group 4: Amphenol Corp. - Amphenol (NYSE: APH) is a major supplier in the AI data center industry, providing essential components like connectors and cables, with a market cap of $173 billion [13]. - The company reported record revenue of $6.19 billion and EPS of $0.93 in Q3, surpassing analyst expectations by 12% and 17% respectively [13]. - APH shares have doubled year-to-date, with technical indicators suggesting continued strength despite recent volatility [16].

Core Insights - The Carillon Scout Mid Cap Fund's third-quarter 2025 investor letter highlights strong corporate earnings and AI infrastructure momentum as key drivers for the Russell Midcap Index's positive returns [1] - Celestica Inc. (NYSE:CLS) is emphasized as a significant holding, showcasing a remarkable 239.87% increase in share value over the past 52 weeks despite a recent one-month decline of 13.70% [2][3] Company Performance - Celestica Inc. reported Q3 2025 revenue of $3.19 billion, reflecting a 28% increase from Q3 2024 [4] - The company is recognized for its contract manufacturing capabilities, particularly in data center hardware and aerospace components, with strong demand for networking switches driving positive quarterly results [3] Market Position - Celestica Inc. is gaining market share in the networking industry through private label solutions, which offer lower total costs and flexible designs compared to branded vendors [3] - The company is expected to see rising earnings estimates as it secures new deals and benefits from existing hyperscaler programs ramping up faster than anticipated [3]

Core Insights - Investors are encouraged to buy top technology stocks, particularly in the AI sector, following a market pullback in November, with a focus on Robinhood Markets and Celestica as strong buy candidates for December and beyond [1][4][6] Group 1: Robinhood Markets - Robinhood has evolved from a free stock-trading app to a significant competitor in the online brokerage space, joining the S&P 500 in September 2025 [5][7] - The company exceeded Q3 earnings estimates by 20%, with a notable increase in its business lines, each generating approximately $100 million or more in annualized revenues [8] - Robinhood's paid Gold Subscribers rose by 77% year-over-year to 3.9 million, and total investment accounts increased by 2.8 million (11%) to 27.9 million, with average revenue per user jumping 82% to $191 in Q3 [8][9] - Consensus earnings estimates for Robinhood have increased by around 20% for 2025 and 2026, projecting a 79% growth in adjusted EPS for 2025, reaching $2.27 per share, compared to a loss of $0.60 in 2023 [9][12] - The stock has surged 225% in the last year and 1,100% over the past three years, currently trading 21% below its average price target, with a PEG ratio at a 50% discount to its highs [12] Group 2: Celestica - Celestica has experienced significant growth, benefiting from the AI arms race, and specializes in manufacturing high-tech electronics for major customers, including AI hyperscalers [13][14] - The company has averaged 20% revenue growth from FY22 to FY24, increasing from $5.6 billion in 2021 to $9.6 billion in 2024, with a projected revenue growth of 26% in 2025 and 31% in 2026 [19][20] - Celestica's adjusted earnings are expected to grow by 52% this year and 39% next year, with a strong earnings outlook contributing to its Zacks Rank 1 (Strong Buy) status [20] - The stock has appreciated approximately 4,000% over the past five years, significantly outperforming the Zacks Tech sector and Nvidia, with 77% of brokerage recommendations being "Strong Buys" [21]

Core Viewpoint - Stocks related to artificial intelligence and data centers are beginning to diverge in performance, with companies linked to OpenAI facing challenges while those associated with Alphabet are thriving [1][2]. Group 1: Performance Divergence - The performance of AI companies linked to OpenAI, such as Nvidia, Oracle, Microsoft, and AMD, has been weaker compared to those affiliated with Alphabet, like Broadcom and Celestica, which are benefiting from investor interest in the new Gemini platform over ChatGPT [2]. - Wall Street is increasingly concerned about OpenAI's significant spending commitments, which may impact its stock performance [2]. Group 2: Financial Health of Companies - Hyperscalers with strong balance sheets, including Alphabet, Meta, and Amazon, are better positioned to invest heavily in AI, while companies like Oracle, CoreWeave, and Nebius are facing financial strain [3]. - The ability of companies to sustain spending on AI initiatives is becoming a critical factor in their market performance [3]. Group 3: Market Volatility and Competition - The AI sector is characterized by volatility, with the potential for new platforms to emerge and surpass existing ones like Gemini [4]. - Nvidia's recent strong quarterly performance contrasts with concerns about competition and its ties to OpenAI, highlighting the mixed signals in the market [4]. Group 4: Investor Sentiment and Market Dynamics - The diversification of the AI trade is viewed positively, as it indicates that investors are becoming more discerning about which companies are likely to succeed [5]. - The previous trend of the entire AI cohort rallying together is seen as unsettling, suggesting a healthier market dynamic as companies are evaluated on their individual merits [5].

Core Insights - Celestica Inc. (NYSE:CLS) is recognized as a strong investment opportunity within the consumer cyclical sector, particularly due to its role in the AI ecosystem by providing essential infrastructure for data centers [1] Group 1: Analyst Ratings and Price Targets - Barclays maintained an Overweight rating on Celestica's shares and raised the price target to $359 from $357 [2] - Citi upgraded Celestica's stock to Buy from Hold, keeping its price target at $375, citing expectations of over 40% growth in hyperscaler capital expenditure in 2026 after a 75% increase in 2025 [2] Group 2: Financial Performance - Celestica reported third-quarter earnings on October 27th, achieving $3.19 billion in revenue and $1.58 in adjusted EPS, surpassing analyst expectations of $3.04 billion and $1.49 respectively [3] - Following the earnings announcement, Celestica's shares rose by as much as 10%, and management increased the full-year revenue guidance to $12.2 billion from $11.55 billion due to strong demand [3] Group 3: Demand Insights - During the third-quarter earnings call, management indicated strong visibility into customer demand, with forecasts extending 12 to 15 months ahead, particularly related to 2026 budgeting and spending commitments [4] - Management noted that certain customers have made commitments that provide assurance regarding the longevity and scale of their programs, enhancing visibility into future demand [4]