CLS Focuses on High-Bandwidth AI Portfolio: A Sign of More Upside?

Core Insights - Celestica Inc. is experiencing strong demand for its high-bandwidth switches, driven by the rapid growth of generative AI and hyperscale cloud infrastructure [1][3] Group 1: Product Offerings - Celestica's 800G Ethernet provides extremely high data speeds, low latency, and better power efficiency, facilitating faster communication in large AI and cloud data centers [2] - The next-generation 1.6T Ethernet includes DS6000 and DS6001 switches, delivering up to 102.4 Tbps switching capacity, designed for high-bandwidth AI and machine-learning clusters [2] - The company has launched the Enterprise Campus Access Switch, ES1500, which offers up to 48× 2.5 GbE ports and 220 Gbps switching capacity, enhancing AI-ready enterprise edge connectivity [2][7] Group 2: Market Position and Competition - Celestica partners with major cloud providers and tech companies to deliver custom, energy-efficient hardware for AI applications, indicating a strong market position [3][7] - Competitors include Jabil, which has launched J 422G servers for heavy AI tasks, and Flex, which offers liquid-cooled servers and advanced power products for high-density AI data centers [4][5] Group 3: Financial Performance - Celestica's shares have increased by 199.7% over the past year, outperforming the industry growth of 93.7% [6] - The company trades at a forward price-to-earnings ratio of 35.89, higher than the industry average of 24.13 [8] - Earnings estimates for 2025 have risen by 6.3% to $5.90, while estimates for 2026 have increased by 20.9% to $8.20 [9]