Celestica (TSX:CLS) inventory is down 13% in Could, as shareholders guide earnings after a 55% rally in April. This dip is a chance to seize this magnificent Canadian tech inventory because it rides the bogus intelligence (AI) rally. At $494, the inventory would possibly look a bit costly because the price-to-earnings ratio is 43 occasions. But it surely is a chance to not miss, as a result of one other 30–50% rally is within the playing cards within the second half of 2026.
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Why is that this magnificent Canadian tech inventory a buy-and-hold for many years?
Celestica makes Ethernet switches and different community infrastructure gear for hyperscalers and telcos. The rising AI funding known as for extra than simply third-party manufacturing. Purchasers demanded product testing, after-sales providers, designing, and extra. Celestica used it as a possibility to increase into design and develop into an unique design producer (ODM).
The U.S. tariffs posed threats to electronics exports, so it invested capital in constructing capability and design centres in Texas, Mexico, Taiwan, and Japan.
Changing challenges into alternatives opened new development avenues for Celestica. Its new ODM capabilities and presence in the US noticed the corporate safe a networking change know-how partnership for AMD’s “Helios” rack-scale AI platform.
Why look far?
Celestica’s dwelling nation, Canada, is investing billions in AI infrastructure. BCE is constructing an AI knowledge centre in Saskatchewan, and Telus has introduced a $66 billion funding over the subsequent 5 years in networking and AI infrastructure. Celestica may benefit from these investments.
The 2026 development prospects of this magnificent Canadian tech inventory
Celestica’s Connectivity & Cloud Options phase has communications and enterprise purchasers. This 12 months, its enterprise phase is seeing sturdy development because the producer has secured three hyperscaler prospects, with most orders due for supply within the second half.
A 3 occasions price-to-sales ratio relies on the final 12-month income determine. Nevertheless, the corporate is rising its income by 51% year-over-year. It has additionally revised its 2026 income steerage up 12% to $19 billion, representing a 53% enhance from 2025. Any new revision in steerage will drive the top off.
Celestica’s long-term development prospects
Aside from the 2026 development, Celestica’s long-term development will probably be cyclical. As soon as the primary wave of AI infrastructure is over, development will stagnate till one other improve comes, similar to communications infrastructure. Nevertheless, the long run cyclical rallies will not be as aggressive as the present one.
Consider it like Micron Expertise (NASDAQ:MU). Micron makes reminiscence chips for digital gadgets and knowledge centres. Its inventory surges every time firms spend money on cloud infrastructure or new computer systems and cell phones. The 2026 infrastructure funding is driving cash to semiconductor firms. The necessity for sovereign AI is driving localization, creating extra alternatives in main nations.
A 30% common annual development charge will be anticipated from Celestica inventory within the subsequent 10 years, with a majority of the expansion skewed between 2026 and 2030.
