Core Insights - Celestica Inc. (NYSE:CLS) is highlighted as a strong investment opportunity with a Buy rating and a price target of $350 from Aletheia Capital [1] - The company is positioned as a key manufacturing partner for Google's TPU modules and networking switches, and plans to onboard OpenAI for its Capricorn server, the first ASIC-based AI server [1] Group 1: Financial Projections - Aletheia Capital anticipates that the deployment of Gothfish and Zebrafish ASIC servers for Google will significantly increase unit and content value, potentially doubling Celestica's enterprise revenue for fiscal 2026 and adding another 50% growth for fiscal 2027 [2] - The firm expects communication sales to triple from fiscal 2024 to fiscal 2027, reaching $12.6 billion, driven by 800Gbps switch upgrades for AI infrastructure at Amazon and Google [3] Group 2: Company Overview - Celestica Inc. designs and manufactures hardware platforms and provides supply chain solutions, operating through two main segments: Advanced Technology Solutions and Connectivity & Cloud Solutions [3]

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]

Core Insights - Broadcom Inc. has granted CEO Hock E. Tan a long-term equity award linked to the company's success in artificial intelligence, emphasizing the board's commitment to his leadership through the end of the decade [1][5] Compensation Structure - The award, approved on September 3, 2025, includes performance stock units that vest only if Broadcom meets specific AI revenue goals between fiscal 2028 and fiscal 2030, contingent on Tan remaining in his role [2] - At target, the grant covers 610,521 shares, with payouts ranging from zero if revenue does not exceed $60 billion to as much as 300% of target if revenue surpasses $120 billion in any four consecutive quarters [2] Strategic Positioning - The board believes that to compete successfully in a rapidly changing technology industry driven by AI, Broadcom must develop advanced technologies and execute new strategies to meet customer demand [3] - The "Tan PSU Award" comes as Broadcom positions itself at the center of the AI and cloud computing boom, expanding into custom AI accelerators, XPUs, ASICs, networking switches, and data center infrastructure products [4] Industry Dynamics - Broadcom's strategy highlights the importance of Tan's leadership during an unprecedented transformation in the semiconductor industry driven by AI [5] - The award also indicates Broadcom's intention to position its custom silicon as a competitive alternative to Nvidia's dominant AI processors [5] Market Developments - Tan confirmed that Broadcom secured a major AI chip customer, identified as OpenAI, with expectations that 2026 custom chip sales could exceed prior forecasts [6] - Analysts estimate that AI chip revenue could reach $20 billion in 2025, reflecting the growing demand in the market [6] Competitive Landscape - Following Broadcom's $10 billion custom chip deal with OpenAI, Citi analyst Atif Malik cut Nvidia's price forecast, warning of a potential 4% decline in Nvidia's 2026 GPU sales due to intensified competition [7]

Key Takeaways CLS margins remain under pressure due to high research and development costs. Temporary U.S. exemptions aid CLS' CCS segment, which includes servers and networking switches. Despite margin headwinds, CLS shares have surged 125.8% over the past year, outpacing its industry.Celestica Inc. (CLS) remains skeptical of the dynamic macro environment owing to trade policy uncertainty. While the business environment remains fluid with frequent policy adjustments, recent announcements have provided ne ...