Celestics (TSX: CLS) has been in a tear. In the past year, the tech shares rose more than 260%and the heads turned over Bay Street and beyond. A tech shares that are once mainly associated with contract production with low margins, is now reassessed as a fast-growing enabler of cloud infrastructure, artificial intelligence (AI) and advanced technology. With that kind of momentum it is no surprise that investors ask the question: is Celestica still a purchase?
In winnings
Looking at the most recent results, it is difficult not to be impressed. In the second quarter of 2025, Celestica reported a turnover of $ 2.9 billion, an increase of 21% after year. Adapted profit per share (EPS) rose by 54% to $ 1.39, which comfortably defeat expectations. The technical shares also supplied its highest ever adjusted operational margin at 7.4%, powered by a strong demand in both business segments.
The real director here is the transformation of celestics of a raw material assembler in a strategic partner for fast -growing industries. In the Connectivity & Cloud Solutions segment, which includes company servers and network equipment, sales increased year after year 28%. A large part of it was thanks to the growing hardware platform activities of Celestica, which only achieved more than $ 1.2 billion in sales last quarter. That is an increase of 82% last year. With AI Datacenter infrastructure in a secular upward trend, Celestica builds the hardware that keeps the entire system active.
In addition to income, profitability has been scaled. The net result in Q2 reached $ 211 million, more than double the same period last year. The return on equity of the technical shares is above 30%, with a backlog of 12 months net margin of more than 5%. Even more impressive is the free cash flow, which is expected to reach $ 400 million for the entire year, giving Celestica sufficient flexibility for return or reinvestment.
What to view
At the same time, the advanced technology solution segment, which includes space travel, health technology and industrial customers, achieved 7% revenue growth with growing margins. It is slower than the cloud side, but more stable. The diversified model of the company now gives both growth and resilience.
The technical shares also lean in his strength with guidance. The management increased its income prospects for the entire year to $ 11.6 billion and increased the adjusted profit per share (EPS) guidance to $ 5.50. That is a clear signal that it sees a strong visibility of customer demand. And it’s not just wishful thinking. Celestica has purchased more than half a million shares in the last quarter, a tangible show of trust in his future.
However, appreciation is where things become complicated. With the technical stock trade in the neighborhood of $ 260 per share and a forward price/profit (p/e) above 35, Celestica is no longer a hidden gem. The market now praises in growth and impeccable version. Any misstep in the coming quarters, especially around customer concentration or margin pressure, can cause a sharp withdrawal. Add a beta above 1.6, and it is clear that this is a high flyer with the volatility to match.
Fool
That said, Celestica has built a solid pillow. The debt remains modest, with a current ratio of 1.4 and more than $ 300 million in cash at hand. Institutional ownership is high, which suggests that large money buys the long -term story. And with the AI ​​infrastructure cycle early, the wider demand trend will probably remain intact.
For investors who want to ride on the next wave of Technical Buildouts, Celestica offers direct exposure without betting on unproven startups. But timing is important. After a huge meeting it is fair to expect some cooling. A pullback can offer a better access point, especially for people with a long horizon and appetite for growth.
So is Celestica a purchase? For believers in the AI ​​infrastructure story and those who are comfortable with momentum-controlled names, the answer tends to yes. Be ready for some turbulence along the way. For more careful investors, patience can bear fruit. Anyway, this is no longer your average production shares. Celestica plays in a new competition, and it is worth seeing.
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