Reasons Why Celestica Stock is a Buy - Beyond the 77% 1-Year Surge

Core Insights - Celestica Inc. has experienced a significant stock surge of 77.4% over the past year, outperforming the industry growth of 10.9% and competitors like Flex Ltd. and Jabil Inc. [1][2] Group 1: Company Overview - Celestica is a Toronto-based company that operates as a behind-the-scenes partner in the electronics market, providing a comprehensive range of services from design to manufacturing and supply chain management [2] - The company has a diverse product portfolio that is integral to AI applications, indicating a strong growth momentum driven by the AI revolution [2] Group 2: Product and Technology Development - The demand for AI/ML compute and networking products is robust, particularly from hyperscale customers, with key products including high-performance 800G network switches and storage solutions like the SC6100 controller [3][4] - Celestica is integrating next-generation networking products with silicon photonics packaging to optimize supply chain solutions and enhance data center capabilities [4] Group 3: Portfolio Expansion - The introduction of the SC6100, a next-generation all-flash storage controller, aims to deliver superior performance for demanding enterprise applications, leveraging AMD's EPYC processors for improved energy efficiency [6][7] - The company is expanding its production capabilities with over 100,000 square feet in Thailand and an additional 80,000 square feet in Malaysia to meet growing demand [8] Group 4: Financial Performance and Outlook - Earnings estimates for Celestica have increased significantly, with a 47.2% rise for 2024 to $3.65 and a 19.5% increase for 2025 to $3.99, reflecting optimism about the company's growth potential [9] - The company has a trailing four-quarter average earnings surprise of 12.2% and holds a Zacks Rank 1 (Strong Buy), indicating strong potential for further stock price appreciation [10]