Valued on a market capitalization of $ 33 billion, Celestics (TSX: CLS) is a TSX stock that has an absolute tear in the last 12 months, almost 300%. In addition, Celestica shares has returned an emphatic 1,560%in the last decade, so that broader market trendments with a broad margin are crushed.
Since earlier returns do not reflect future profit, let’s see if you should possess these TSX technical shares in the current appreciation.
How did Celestica -shares performed in Q2 2025?
Celestica is a global provider for electronics -Production -services that offers extensive Supply Chain solutions through two segments: advanced technology solutions and connectivity and cloud solutions.
It offers design, development, production, assembly, testing, system integration and after-market services to original manufacturers of equipment and cloud service providers.
Celestica serves various markets, including space travel and the defense, industrial, health tech, capital equipment, communication and business sectors, with special strength in the production of hyperscale data center infrastructure.
Celestica shares are a mandatory investment option if the company proves the unprecedented wave of AI-driven data center expansion. The provider of the electronics production services provided exceptional Q2 results, with a turnover of $ 2.9 billion and adapted profit per share of $ 1.39, both exceeding guidelines.
The investment thesis focuses on the dominant position of celestics in network infrastructure for hyperscale customers. The communication and cloud solutions (CCS) segment grew by 28% on an annual basis, powered by an explosive demand for 800G network switches in addition to continuous strength in 400G products.
In particular, 800 g volumes reached parity with 400 g in Q2, with each large 400 g customer switching to 800 g platforms. This positions Celestica to conquer market share as hyperscalers such as Google” AmazonAnd Microsoft Quickly expand their AI infrastructure.
Management remains optimistic about short -term growth, because it predicts the turnover of $ 11.6 billion in 2025, an increase of 20% year after year. For comparison: the adjusted income is expected to increase by 20% to $ 5.50 per share. Celestica reported an operational margin of 7.4% in Q2, a quarterly record and expects a free cash flow this year to $ 400 million a total of $ 400 million.
The competitive canal of Celestica stems from its worldwide diversified production printing print in 16 countries, so that customers offer the resilience of Supply Chain and geographical flexibility. The company has proven the production of capacity to support $ 3-4 billion in extra income at important locations, including Thailand, Mexico and Texas. This scalability benefit is crucial because hyperscalers continue the spending of aggressive capital expenditures on the AI infrastructure.
Is the TSX shares still undervalued?
Analysts who follow the turnover of Celestica share conversations to increase in 2024 from $ 9.6 billion to $ 19.2 billion in 2028. The adjusted income is expected to expand from $ 3.88 per share to $ 11.2 per share in this period.
Nowadays, the TSX Tech shares is traded with 34 times ahead of income, which is much higher compared to the historic multiple of 10.4 times. If the shares of CLS are priced at 30 times ahead in the profit, this would have to trade around $ 336 in early 2028, which indicates the upward potential of 18% compared to current levels.
The secular tail wind that supports celestic growth remains robust. Hyperscaler customers are located in early innings of multi-year AI infrastructurebuildouts, with recent capital expenditures increases from large cloud providers who validate the ongoing demand environment.
The upcoming transition to 1.6T networks and AI/ML calculation platforms from the next generation offers extra growth catalysts that extend to 2026-2027.
Trade on reasonable valuations Despite exceptional basic principles, Celestica shares offers investors direct exposure to the AI infrastructure tree through a proven implementation partner with market-leading possibilities, strong customer relationships and operational leverage on the volume scale.
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