Celestica Q1 2026 Earnings
53% revenue growth, 80% EPS growth, new 1.6T switch win. The AI infrastructure story is real — but EMS margins at 40x forward is a real risk.
The Numbers
- Revenue: $4.05B — up 53% YoY (vs $2.65B Q1 2025)
- Adjusted EPS: $2.16 — up 80% YoY (vs $1.20)
- Adjusted operating margin: 8.0% vs 7.1% — expanding, but still EMS territory
- 2026 guidance raised: $17B revenue (37% growth), $10.15 adj. EPS
New win: CPO Ethernet switch design contract with a hyperscaler — 1.6 Terabit switch silicon, production ramp in 2027. That's notable.
Business Overview
Celestica is an electronics manufacturing services company. Two segments:
- CCS (Connectivity & Cloud Solutions) — 78% of revenue. This is the AI infrastructure engine.
- ATS (Advanced Technology Solutions) — aerospace, defense, industrial.
Hyperscalers now make up 77% of CCS revenue, up from 51% in 2022. They're essentially a picks-and-shovels play on cloud/AI capex — building the networking switches and compute hardware that hyperscalers need at scale.
Technicals
- Price: ~$410, near 52-week high of $420
- 200-day MA: $275 — stock is 50% above it
- RSI: 76 — overbought
- ADX: 27 — moderate trend strength, not parabolic
The stock has had a massive run. It's not in free-fall but it's extended — no clean setup right now.
Honest Take
The growth is real. 53% revenue growth and 80% EPS growth isn't fluff — they're winning meaningful AI infrastructure contracts. The 1.6T switch win is the kind of design win that locks in multi-year revenue.
But here's the issue: this is still an EMS company. 8% operating margins. Historically EMS trades at 8–15x earnings. CLS is at ~40x forward on $10.15 guidance. The market is pricing it like a semiconductor or software company because of the AI angle. That's a real risk.
Customer concentration is also worth watching. 77% of the main segment tied to hyperscalers means if MSFT, GOOG, META, or AMZN signal any CAPEX pullback, CLS takes a direct hit. We're already seeing noise about AI capex moderation — CLS is exposed to that narrative even if their own business is executing cleanly.
Trade Read
Not at $410 with RSI at 76 off a 53% beat. The story is good, the execution is real, but the risk/reward isn't there right now. This needs to breathe.
Better entry zone: $330–360. That gets you to ~33–35x forward — still a premium to historical EMS multiples but justified by the growth profile. A pullback driven by macro noise or hyperscaler capex headlines (not a Celestica-specific miss) would be the setup.
Watch for: any MSFT/GOOG/META capex guidance in their earnings. That's the real driver of CLS's ceiling.