Bernstein analysts highlight Celestica as a key beneficiary of networking bottlenecks in AI data centers. The Toronto-based manufacturer produces custom hardware, including servers and Ethernet switches with speeds of 400G, 800G, and 1.6T, for major hyperscalers.
Celestica serves as a primary partner for Google in developing Tensor Processing Unit systems and network upgrades. The company is currently expanding its manufacturing capacity in Texas to support these long-term projects and is also scaling production for OpenAI’s large-scale initiatives.
The company projects revenue of $20.5 billion for 2026, representing a 65% year-over-year increase. Growth is driven by the Connectivity and Cloud Solutions segment, which focuses on high-bandwidth networking. Total capital expenditure for data centers by major tech firms is expected to reach $650 billion in 2026.
To fund expansion, Celestica recently completed a $3 billion equity offering. While more than 22 analyst firms maintain a Buy rating with an average price target of $447, Bernstein has set a target of $520. The company's stock has increased more than 10 times over the past two years.
