Celestica Inc. (CLS) Soars as Tech Boom Continues, Jim Cramer Says

Celestica Inc. (CLS) shares have gained 124% year-to-date and soared 20.4% in July after beating analyst revenue and EPS estimates. Jim Cramer attributes the performance to general bullishness surrounding tech, making it Canada's third-most valuable firm. Cramer considers Celestica a manufacturer for tech, which is good today.

Celestica Inc. (CLS) has experienced a remarkable surge in its stock price, gaining 124% year-to-date and soaring 20.4% in July. This significant increase can be attributed to the company's strong second-quarter (Q2) results and an optimistic outlook for the future.

The company reported revenue of US$2.9 billion, an 8.4% increase over estimates, and statutory earnings per share (EPS) of US$1.82, which was 66% ahead of expectations [2]. These results led to a re-rate of the stock, with analysts upgrading their earnings per share estimates and revenue projections. The consensus forecast for 2025 revenue is now US$11.6 billion, a 9.8% improvement from the previous 12 months, with statutory EPS expected to swell 13% to US$5.28 [2].

Celestica's Q2 results were particularly strong in its high-performance networking and AI-related infrastructure segments, driven by robust demand from hyperscalers. The company raised its 2025 revenue guidance to US$11.55 billion from US$10.85 billion, an increase of 20% year-over-year. Adjusted earnings per share guidance also rose to US$5.50 from US$5.00, marking a 42% increase [1].

RBC Dominion Securities analyst Paul Treiber noted the company's continued strong growth and improving revenue mix, supporting the view that Celestica's valuation premium is likely to be sustained. He raised his 2026 forecasts to revenue of US$13.3 billion and adjusted EPS of US$6.35, and his 2027 estimates to US$15.8 billion in revenue and US$7.75 in EPS [1].

Jim Cramer, a prominent financial analyst, attributed Celestica's performance to general bullishness surrounding tech. He considers Celestica a manufacturer for tech, which is good today [3, 4]. Cramer acknowledged the potential of CLS as an investment but believes certain AI stocks offer greater upside potential and carry less downside risk.

Celestica's improving business mix is also yielding margin expansion. Adjusted EBIT margin rose 110 basis points year-over-year to a record 7.4% in Q2 [1]. The company expects 800G shipments to account for more than half of its networking volume in the second half of 2025 and a next-generation AI/ML custom compute contract to drive a return to positive growth in its CCS Enterprise segment by Q4 [1].

Analysts have increased their price target for Celestica, with the most bullish analyst valuing it at CA$318 and the most bearish at CA$304 per share, reflecting a tight range of estimates [2]. Treiber reiterated his "Outperform" rating and raised his target price to US$225 from US$185, well above the Street average of US$176.61 [1].

In conclusion, Celestica's strong Q2 results and optimistic outlook have led to a significant surge in its stock price. The company's continued growth in high-performance networking and AI-related infrastructure, along with margin expansion, suggests a bright future for Celestica. Investors should closely monitor the company's progress and the broader tech industry trends.

References:
[1] https://www.cantechletter.com/2025/07/celestica-price-target-raised-to-us-225-at-rbc/
[2] https://finance.yahoo.com/news/celestica-inc-just-recorded-66-114432785.html
[3] https://finance.yahoo.com/news/celestica-inc-cls-huge-says-182529036.html
[4] https://finance.yahoo.com/news/jim-cramer-says-celestica-belong-033222847.html