Can Celestica's Tie-Up With AMD for AI Switches Stoke Growth?

Celestica Inc. CLS has joined hands with Advanced Micro Devices, Inc. AMD to power the new Helios rack-scale artificial intelligence (AI) platform. The partnership brings together Celestica’s engineering, manufacturing and supply chain expertise with AMD’s high-performance computing to accelerate large-scale AI deployments.

Per the agreement, Celestica will lead the research, development, design and production of scale-up networking switches for the platform. Built on the Open Compute Project (OCP) & Open-Rack-Wide (ORW) form factor, these switches will enable high-speed interconnectivity for AMD’s next-generation Instinct MI450 Series GPUs. It will also integrate advanced networking silicon and the Ultra Accelerator Link over Ethernet (UALoE) architecture to ensure optimized performance for large-scale AI clusters.

The switches will support deployments of the Helios platform across cloud, enterprise and research environments, meeting the growing need for efficient and flexible AI infrastructure. Its open-standards design will speed up AI adoption and strengthen supply chains for organizations investing in AI.

The collaboration strengthens Celestica’s position as a key provider of advanced data center and AI networking solutions. With its growing role in next-generation AI platforms and strong switch portfolio, the company is well placed to benefit from rising demand in the global AI and hyperscale computing market.

How Are Competitors Advancing in AI Networking Switches Portfolio?

Celestica faces competition from Arista Networks, Inc. ANET and NVIDIA Corporation NVDA. Arista is expanding its AI networking switch portfolio with faster 800G Ethernet switches to support large AI data-center clusters. Arista recently signed a multi-source agreement to develop a new liquid-cooled AI optics module, XPO, to improve network performance.

NVIDIA is strengthening its AI networking switch business by developing high-bandwidth Ethernet switches, such as the Spectrum-X platform, to connect massive AI GPU systems. These next-generation switches use advanced technologies such as silicon photonics to improve speed, efficiency and scalability in hyperscale AI infrastructure networks. The company partnered with Cisco Systems to develop AI facility solutions using high-performance networking switches.

Celestica's Price Performance, Valuation & Estimates

Celestica shares have skyrocketed 222.3% over the past year compared with the industry’s growth of 122%.

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From a valuation standpoint, Celestica trades at a forward price-to-earnings ratio of 29.29, up from the industry average of 22.36.

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Earnings estimates for 2026 have increased 7.55% to $8.83 over the past 60 days, while the same for 2027 has increased 7.05% to $12.61.

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Celestica currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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