Celestica's shares are experiencing a sharp rally in premarket trading, climbing more than 26% after the company reported financial results that showed accelerating growth amid the ongoing artificial intelligence boom. The surge has helped recover some of the losses the stock suffered in recent weeks, positioning it as one of the top performers on Wall Street today.
The Toronto-based technology firm delivered a robust performance, with revenue jumping 83% year-over-year to $5.83 billion, up from $3.19 billion in the same period last year. This growth was fueled by strong demand from hyperscale cloud providers such as Apple and Amazon, which are significantly increasing their investments in AI infrastructure.
Profitability also improved substantially, with earnings per share rising to $3.26 from $2.31 in the prior-year quarter. More notably, management's forward guidance exceeded analyst expectations by a wide margin. While analysts had projected annual revenue of $20.6 billion for 2026 and $35.7 billion for 2027, the company now expects revenue to surpass $40 billion next year—a figure that implies an approximate 82% growth rate from current levels.
For the fourth quarter, Celestica guided revenue in the range of $6.27 billion to $6.57 billion, well above the consensus estimate of $5.47 billion. The company also anticipates continued earnings growth, with fourth-quarter EPS expected to reach $2.96.
These results position Celestica as one of the fastest-growing companies globally. Despite the impressive growth, the stock's valuation remains relatively modest. The forward price-to-earnings ratio stands at 23.2, slightly above the sector median of 21.6 and modestly higher than its five-year average of 19. This has led analysts to become increasingly bullish on the stock.
Several financial institutions have raised their price targets following the earnings release. BMO Capital Markets increased its target to $400, while RBC Capital Markets lifted its target to $450. TD Securities and UBS both set price targets of $430.
From a technical perspective, the stock had peaked at $472 in June before entering a bearish phase, dropping to $244 earlier this week—a level that coincided with its March lows. The shares had been trading below both the 50-day and 200-day exponential moving averages, reflecting investor concerns about a potential AI bubble. However, the post-earnings rally has pushed the stock to around $286, a level that aligns with a key support-turned-resistance zone on the Murrey Math Lines indicator.
Looking ahead, the most likely scenario is that the stock continues its upward momentum in the near term, potentially reaching the psychological $300 level. However, sustained gains may be limited as long as broader AI market jitters persist.
This article is for informational purposes only and does not constitute financial advice.
