Celestica Skyrockets 15.95%—Is This the Start of a New Bullish Era?

Summary
• Celestica (CLS) surges to a 52-week high of $208.66 amid a Zacks Rank 1 upgrade and Q2 earnings beat
• Intraday volatility sees CLS swing from $183.17 to $208.66, a 14% range
• Options frenzy: 2025-08-08 chain sees 119 contracts for $185 call, 337 contracts for $215 call
Today’s meteoric rise in Celestica’s stock is a masterclass in momentum-driven euphoria. A Zacks upgrade, robust earnings, and AI-driven demand have collided to create a perfect storm for bulls. With turnover at 11.3% of float and a 66.5 RSI, the question is whether this is a sustainable rally or a short-term spike.

Zacks Upgrade and Earnings Beat Fuel Explosive Move
Celestica’s 15.95% surge is anchored by a Zacks Rank 1 upgrade driven by a 0.6% increase in earnings estimates over three months. Q2 results revealed a 21% revenue jump to $2.89 billion, fueled by a 28% surge in Connectivity & Cloud Solutions (CCS) to $2.07 billion. The CCS segment, now 71.6% of revenue, is capitalizing on AI infrastructure demand, with hyperscalers driving 400G/800G switch sales. Non-GAAP EPS of $1.39 beat estimates by 15 cents, while free cash flow hit $119.9 million. Analysts now forecast $5.50/share in 2025 adjusted earnings, up from $5.00, validating the Zacks rating’s predictive power.

Communication Equipment Sector Lags as Celestica Outperforms
While Celestica soars, the broader Communication Equipment sector remains muted. Sector leader Cisco (CSCO) trades flat at 0.05% despite CLS’s 15.95% gain. This divergence highlights Celestica’s unique positioning in AI-driven infrastructure. Unlike peers focused on 5G or IoT, CLS’s CCS segment is directly aligned with hyperscalers’ AI spending cycles. The sector’s 38.9 P/E ratio lags CLS’s 47.8 P/E, but CLS’s 19.3% revenue CAGR over three years justifies the premium. However, CLS’s 4.1% net margin versus the S&P 500’s 11.9% remains a caution.

Options and ETF Strategy: Leverage the Bullish Momentum
• 200-day average: 103.79 (far below) • RSI: 66.52 (overbought) • MACD: 8.47 (bullish) • Bollinger Bands: 149.13–172.05 (price at 201.03, outside upper band)
Celestica’s technicals scream breakout. The stock trades above its 200D MA by 94% and RSI near overbought territory. With 66.52 RSI and a 8.47 MACD, the momentum is intact. Key levels: 200D MA at 103.79 (strong support), 200D Bollinger Band at 149.13 (medium support), and 172.05 upper band (broken). Short-term bulls should target 200–215 as resistance. No leveraged ETF data is available, but the Trefis High Quality portfolio offers a diversified alternative for risk-averse investors.
Top Option 1: CLS20250808C200 (Call, Strike 200, Expiry 2025-08-08)
• Implied Volatility: 58.83% (moderate) • LVR: 23.58% (high) • Delta: 0.5339 (moderate) • Theta: -0.7657 (high decay) • Gamma: 0.0194 (high sensitivity) • Turnover: $249,319 (high liquidity)
Payoff at 5% upside (211.08): $11.08/share. This call offers high leverage with manageable time decay, ideal for a continuation of the AI-driven rally.
Top Option 2: CLS20250808C215 (Call, Strike 215, Expiry 2025-08-08)
• Implied Volatility: 63.06% (high) • LVR: 54.91% (very high) • Delta: 0.2829 (moderate) • Theta: -0.5505 (moderate decay) • Gamma: 0.0154 (high sensitivity) • Turnover: $160,426 (high liquidity)
Payoff at 5% upside: $6.08/share. This deep OTM call provides explosive potential if CLS breaks 215, leveraging high IV and gamma for aggressive position sizing.
Aggressive bulls may consider CLS20250808C200 into a break above 200 or CLS20250808C215 if 205 is cleared.

Backtest Celestica Stock Performance
The backtest of CLS's performance after a 16% intraday increase shows favorable results, with win rates and returns indicating positive short-to-medium-term gains. The 3-Day win rate is 55.01%, the 10-Day win rate is 62.32%, and the 30-Day win rate is 66.30%, suggesting that the index tends to perform well in the immediate aftermath of such a surge. The maximum return during the backtest period was 18.33%, which occurred on day 59, further highlighting the potential for gains following a significant intraday increase.

Bullish Momentum Intact—Act Now to Ride the Wave
Celestica’s 15.95% surge is underpinned by AI infrastructure demand and earnings revisions. The stock’s 66.5 RSI and 8.47 MACD suggest momentum remains intact, but the 4.1% net margin and 35% historical drawdowns during market crashes warrant caution. Investors should monitor the 200D MA at 103.79 and 200D Bollinger Band at 149.13 as critical support levels. The sector’s underperformance, with Cisco flat at 0.05%, highlights CLS’s unique positioning. For immediate action, CLS20250808C200 offers a balanced play on the 200–215 breakout target. If 200 is cleared, the 215 call becomes a high-leverage play. Watch for 200D MA retest or earnings guidance upgrades in August.