Celestica Plummets 6.5% Amid AI-Capex Frenzy and Legal Scrutiny – What’s Next?

Summary
• Celestica (CLS) slumps 6.5% to $280.43, erasing $19.57 from its price in under 4.5 hours
• Management’s $1B AI-related CapEx plan sparks investor jitters and a Pomerantz investigation
• TD Securities upgrades price target to $330, yet shares hit intraday low of $279.03

Celestica’s dramatic intraday selloff reflects a collision of strategic ambition and market skepticism. The stock’s 6.5% drop—its worst in months—follows management’s aggressive capital allocation for AI infrastructure expansion, which analysts view as both a growth catalyst and a near-term risk. With institutional ownership at 67.38% and a 52-week high of $363.40 now 25% distant, the stock’s volatility underscores the sector’s high-stakes AI bet.

AI-Capex Acceleration and Legal Scrutiny Trigger Sharp Selloff
Celestica’s intraday plunge stems from a dual shock: management’s announcement of a $1B accelerated AI-related CapEx program and the subsequent Pomerantz investigation. While the move signals long-term growth in hyperscaler demand, the upfront cash outflow and legal uncertainty spooked investors. TD Securities’ $330 price target (16.9% upside) and JPMorgan’s $360 upgrade failed to offset immediate concerns over execution risks and margin pressure. The stock’s 5.9% drop to $282.19 post-announcement highlights the market’s preference for near-term clarity over long-term potential.

Electronic Equipment Sector Volatility: Jabil Drives Mixed Momentum
The Electronic Equipment, Instruments & Components sector saw mixed momentum, with Jabil (JBL) down 3.16% as of 20:35 ET. Celestica’s selloff outpaced sector peers, reflecting its unique exposure to AI-driven CapEx cycles and legal risks. While Jabil’s decline aligns with broader sector jitters over margin compression, Celestica’s drop is more tied to its aggressive AI infrastructure bets. The sector’s 52-week high of $363.40 for Celestica contrasts with Jabil’s 100-day average of $148.50, underscoring divergent investor sentiment.

Options Playbook: Capitalizing on Volatility with Strategic Put/Call Selection
• MACD: 2.898 (bullish divergence), Signal Line: 1.435, Histogram: 1.463 (positive momentum)
• RSI: 53.09 (neutral), Bollinger Bands: Upper $336.86, Middle $308.73, Lower $280.60 (price near lower band)
• 200D MA: $219.93 (far below current price), 30D MA: $304.25 (resistance ahead)

Celestica’s technicals suggest a short-term bearish bias with long-term bullish potential. Key levels to watch include the 200D MA ($219.93) and 30D MA ($304.25). The stock’s 53.09 RSI and 2.898 MACD indicate a potential rebound from oversold territory, but the Bollinger Bands suggest volatility remains high. For options, two contracts stand out:

• CLS20260206P275 (Put):
- Strike: $275, Expiry: 2026-02-06
- IV: 76.94% (high volatility), Leverage: 28.22% (moderate), Delta: -0.4056 (moderate sensitivity), Theta: -0.1187 (moderate time decay), Gamma: 0.0121 (high sensitivity to price swings), Turnover: $254,147 (liquid)
- Payoff (5% downside): $280.43 → $266.41 → max(0, $275 - $266.41) = $8.59 gain
- This put offers asymmetric upside in a bearish scenario, with high gamma and IV to capitalize on volatility.

• CLS20260206C275 (Call):
- Strike: $275, Expiry: 2026-02-06
- IV: 81.44% (high volatility), Leverage: 17.08% (moderate), Delta: 0.5918 (strong directional bias), Theta: -1.6136 (aggressive time decay), Gamma: 0.0115 (high sensitivity), Turnover: $836,911 (liquid)
- Payoff (5% upside): $280.43 → $294.45 → max(0, $294.45 - $275) = $19.45 gain
- This call is ideal for aggressive bulls expecting a rebound above $300, leveraging high IV and liquidity.

Hook: If $300 breaks, CLS20260206P275 offers short-side potential; bulls may chase CLS20260206C275 into a bounce above $300.

Backtest Celestica Stock Performance
The backtest of CLS's performance after a -7% intraday plunge from 2022 to the present reveals favorable short-to-medium-term gains. The 3-Day win rate is 59.25%, the 10-Day win rate is 61.89%, and the 30-Day win rate is 69.16%, indicating a higher probability of positive returns in the immediate aftermath of the plunge. The maximum return during the backtest was 24.26% over 30 days, suggesting that while there was some volatility, CLS exhibited resilience and the potential for recovery.

Act Now: Celestica’s Volatility Presents High-Risk, High-Reward Opportunities
Celestica’s selloff reflects a pivotal moment in its AI-driven transformation. While the $1B CapEx plan signals long-term ambition, near-term execution risks and legal scrutiny demand caution. The stock’s 52-week high of $363.40 remains a distant target, but the 200D MA ($219.93) and 30D MA ($304.25) offer critical directional clues. Jabil’s -3.16% decline highlights sector-wide margin concerns, but Celestica’s unique exposure to AI infrastructure makes its path distinct. Investors should monitor $280 support and $300 resistance for directional clarity. Act now: Short-term traders may scalp the CLS20260206P275 put if $280 breaks, while long-term bulls can dollar-cost average into the $275 call ahead of the 2026-02-06 expiry.