Celestica Inc. CLS is an under-the-radar picks and shovels technology stock providing investors exposure to growth across artificial intelligence, the energy transition, and beyond.

CLS stock crushed Nvidia over the past three years and the last 12 months. Yet, the recent growth and AI selloff has Celestica trading 20% below its all-time highs and 20% below its average Zacks price target.

The electronics manufacturing services powerhouse is projected to post double-digit sales and earnings growth in 2025 and 2026 to extend Celestica’s impressive run.

On top of that, Celestica trades at a discount to the Zacks Tech Sector in terms of forward earnings and sales, and it found support at a key moving average on Wednesday.

Why Celestica is a Great Tech Stock to Buy and Hold  

Celestica is an electronics manufacturing services standout. CLS specializes in designing, engineering, and manufacturing products for companies across various critical areas including global megatrends from AI data centers to the energy industry expansion/transition.

Celestica’s expertise across data centers, semiconductor equipment, and energy generation and storage are some of its most critical growth areas.

Celestica also benefits from the long-term upside across aerospace and defense, telecom, healthcare tech, supply chain solutions, and beyond.

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Celestica operates two reportable units: Advanced Technology Solutions (ATS) and Connectivity & Cloud Solutions (CCS).

Celestica’s services across these segments include Design and Engineering, Manufacturing Services, Logistics and Fulfillment, Precision Machining, Product Licensing Services, and beyond.

Celestica’s Recent Growth and Outlook

Celestica, which went public in the late 1990s, supercharged its growth over the last several years given its ability to support the key growth industries we just mentioned.

Celestica averaged 20% revenue growth between FY22-FY24 to soar from $5.6 billion in 2021 to $9.6 billion in 2024. The picks and shovels tech company’s earnings growth was staggering, averaging roughly 65% EPS expansion on a GAAP basis during that stretch.

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Most recently, Celestica grew its 2024 revenue by 21%, with adjusted (non-GAAP) EPS up 58% and GAAP earnings 68% higher. The company provided upbeat guidance when it reported its Q4 results on January 29, projecting that its momentum will “continue beyond this year, and into 2026.”

“Overall, the current demand environment for data center hardware is robust, as evidenced by recent customer forecasts as well as new AI program awards over the last 90 days, including our second and third 1.6T program wins,” CEO Rob Mionis said in prepared Q4 remarks.

Celestica highlighted some of its recent big customer wins, including a “1.6 Terabyte switching program with a second Hyperscaler customer…. supporting the customer with the design and production of a fully AI-optimized networking rack.” AI Hyperscalers include Meta, Amazon, Microsoft, and other technology giants.

CLS also secured an award for a new hardware platform solutions “program with a leading Digital Native Company” to “deliver a full rack AI-optimized system solution.”

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Celestica is projected to grow its revenue by 12% in 2025 and 18% in 2026 to $12.72 billion. The tech firm is expected to expand its adjusted earnings by 22% and 19%, respectively.

Celestica’s first-quarter 2025 earnings estimate jumped 12% since its release, with its FY25 outlook 7% higher. The recent upbeat earnings revisions help it land a Zacks Rank #1 (Strong Buy) and extend its stellar stretch of earnings revisions.

Buy this Tech Stock on the Dip for Value and AI Growth

Celestica stock soared roughly 1,600% in the past five years, crushing the Zacks Tech sector’s 135% and its highly-ranked Electronics - Manufacturing Services industry’s 350%. More recently, CLS has ripped 834% higher in the past three years, blowing away Nvidia’s NVDA 430% and Tech’s 46%.

Celestica stock also more than doubled Nvidia during the past 12 months, up 166%. The run snapped an extended period of underperformance for Celestica, with the stock now up 990% in the past 15 years vs. Tech’s 600%.

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Celestica quickly recovered from the DeepSeek AI selloff. Its strong Q4 results pushed it to new highs in early February ($144 a share). The recent growth and AI selloff heading into Nvidia’s earnings release on Wednesday has Celestica trading 22% below its all-time highs and 20% below its average Zacks price target at roughly $112 a share.

Celestica climbed on Wednesday, attempting to find support at its 50-day moving average for the second time in 2025. CLS fell from heavily overbought RSI levels in January to below neutral.

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Celestica stock trades at a discount to the Zacks Tech Sector (25.8X) at 23.6X forward 12-month earnings. Its forward earnings multiple represents a 33% discount to its 10-year highs.

Celestica trades at 1.1X forward 12-month sales for a staggering 80% value vs. Tech’s 6.3X.

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This article originally published on Zacks Investment Research (zacks.com).

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