There are compelling reasons to consider investing in artificial intelligence (AI) equities. According to the United Nations Conference on Trade and Development, the worldwide AI sector is projected to skyrocket from $189 billion in 2023 to $4.8 trillion by 2033—a 25-fold surge over ten years.
Nvidia ( NVDA -0.82%), the top provider of AI chips and related technologies, has attracted widespread attention due to its outstanding stock gains. The recognition is well-deserved, and I continue to be highly optimistic about its future.
However, there is a large-cap AI company that has outperformed Nvidia’s stock so far in 2025, as well as over the past year, three years, and even five years: electronics manufacturing services (EMS) company Celestica ( CLS -6.67%).
Celestica, a well-established and profitable business, merits far more recognition. I think its limited coverage in the U.S. financial media is mainly because it is headquartered in Toronto, Canada, rather than in the United States. Still, Celestica shares are listed on both the New York and Toronto Stock Exchanges, making them easily accessible to American investors.
If you invest in AI or technology stocks, Celestica is a name you should seriously consider.
Image source: Getty Images.
Celestica stock's performance
| Celestica | 174% | 409% | 2,570% | 3,190% | 1,860% |
| Nvidia | 31.6% | 49.9% | 1,220% | 1,350% | 31,110% |
| Palantir | 141% | 395% | 2,220% | 1,820%* | N/A |
| S&P 500 Index | 14.4% | 18.2% | 78.7% | 116% | 306% |
Sources: Yahoo Finance and finviz.com. YTD = year to date. Data as of Friday, Sept. 19, 2025, unless otherwise indicated. *Palantir’s five-year return reflects a period seven trading days short of five years, as the company went public on Sept. 30, 2020.
Celestica’s shares have surpassed Nvidia’s in every time frame up to five years. Over a decade, Nvidia takes the lead. Both companies have significantly outperformed the S&P 500 index, which serves as a benchmark for the broader market, in all periods shown.
Celestica has also outperformed another AI favorite—Palantir Technologies ( PLTR -1.60%)—for every period since Palantir began trading as a public company.
Celestica's business: Good corporate DNA
Celestica stands as a top provider of electronic manufacturing services (EMS). The company delivers design, manufacturing, hardware platform, and supply chain solutions to many of the world’s largest corporations in technology and other industries. Its global footprint includes more than 40 manufacturing and design sites.
I refer to Celestica as having strong corporate DNA because it originated as a spin-off from tech giant IBM. In 1996, IBM sold Celestica to a group of investors, and by 1998, Celestica had completed its initial public offering (IPO).
The company’s financials—and, as a result, its stock—began to surge in 2023, fueled by robust demand for its services and hardware platform solutions from businesses deeply engaged in AI.
Celestica operates through two main segments: advanced technology solutions (ATS) and connectivity & cloud solutions (CCS). ATS covers its aerospace and defense, industrial, health technology, and capital equipment divisions. CCS includes its communications and enterprise (servers and storage) markets.
Importantly, CFO Mandeep Chawla noted during Celestica’s Q4 2024 earnings call in January that the company “works with the top five hyperscalers.” These typically include Amazon, Microsoft, Alphabet, Meta Platforms, and likely Apple. Hyperscalers are companies that run massive data centers focused on AI, often (but not always) to support their cloud computing operations.
Celestica's key financial and stock stats
| Celestica | $29.1 billion | 37.6 | 27.3% |
Source: Finviz.com. P/E = price-to-earnings ratio. EPS = earnings per share. Data as of Sept. 19, 2025.
During the first six months of 2025, Celestica’s revenue climbed 20% year over year to $5.54 billion. Adjusted net income jumped 46% to $301.3 million, resulting in a 50% increase in earnings per share (EPS) to $2.59. The company maintained strong cash flow, and its debt remains manageable, with a long-term debt-to-equity ratio of 0.55.
Growth is being propelled by the connectivity & cloud solutions (CCS) division. In the second quarter, total revenue increased 21% year over year to $2.89 billion. CCS revenue soared 28% to $2.07 billion, while ATS revenue grew by 7%. Within CCS, hardware platform solutions revenue surged 82% year over year to $1.2 billion.
In July, management raised its full-year 2025 outlook, citing “strengthening demand outlook from our CCS customers,” with the following updated guidance:
- Revenue projected at $11.55 billion, up from $10.85 billion, representing 20% annual growth.
- Adjusted EPS forecast at $5.50, up from $5.00, reflecting 42% annual growth.
- Free cash flow expected to reach $400 million, up from $350 million, a 31% annual increase.
Now, regarding valuation: Celestica trades at 37.6 times Wall Street’s projected one-year forward EPS. This is somewhat expensive for a company anticipated to grow EPS at an average annual rate of 27.3% over the next five years.
Nonetheless, investors often pay a premium for high-quality businesses. If Celestica continues to surpass analysts’ earnings expectations, its valuation may prove more reasonable than it currently appears. Over the last four quarters, the company has beaten consensus estimates each time, with an average outperformance of 9.1%.
Additionally, using similar valuation measures, Celestica is far more attractively priced than Palantir. It is also generally more reasonably valued than all of the “Magnificent Seven” stocks except Nvidia, which includes Microsoft, Amazon, Alphabet, Meta Platforms, Apple, and Tesla.
Celestica expects no material impact on 2025 earnings from tariffs
When updating its 2025 outlook, Celestica addressed the issue of tariffs: “Nearly all tariffs paid by Celestica are anticipated to be recovered from our customers and are not expected to have a significant effect on our ... [adjusted] net earnings.”
In summary, for those seeking growth opportunities, Celestica is a stock worth buying—or at least adding to your watchlist.
Celestica is set to announce its third-quarter earnings after the market closes on Monday, Oct. 27.
