Core Insights - Celestica (CLS) has experienced a significant stock increase of 116% over the past year and an impressive 2,145% over the past three years, indicating strong market performance despite valuation concerns [1] - The company is set to invest $1 billion in capacity expansion to meet rising demand for AI infrastructure, reinforcing its long-term investment potential [2] Company Overview - Celestica operates through two main segments: Advanced Technology Solutions (ATS) and Connectivity & Cloud Solutions (CCS) [3] - ATS serves sectors such as aerospace and defense, industrial applications, HealthTech, and capital equipment, while CCS focuses on communications and enterprise markets, including servers and storage systems [4] Market Demand and Growth - The surge in demand from the communications end market, particularly in data center networking, is a significant growth driver for Celestica [5] - Revenue from the communications end market increased by 79% in Q4, largely due to strong demand and the scaling of 800G networking switch programs for major hyperscaler customers [6] - The enterprise end market also saw robust growth, with revenue up 33%, driven by the ramp-up of a next-generation AI and machine learning compute program for a major hyperscaler client [6] Segment Performance - A notable portion of growth is attributed to Celestica's Hardware Platform Solutions (HPS) business within the CCS segment, which generated $1.4 billion in Q4 revenue, a 72% year-over-year increase, and accounted for 38% of total company revenue [7] - The growth in HPS was primarily due to rising volumes in 800G switch programs across multiple hyperscaler customers [7]