Aletheia Capital initiates Celestica stock with Buy rating, $350 target

Investing.com - Aletheia Capital initiated coverage on Celestica (NYSE:CLS) with a Buy rating and a $350 price target on Monday. The stock has shown remarkable momentum, delivering a 286% return over the past year, though InvestingPro data indicates the stock is currently trading above its Fair Value.

The research firm cited Celestica’s position as a key manufacturing partner for Google’s TPU modules and networking switches, with plans to onboard OpenAI in the second half of 2026 for its first ASIC-based AI server called Capricorn. As a prominent player in the Electronic Equipment industry, Celestica maintains a strong financial health score of "GREAT" according to InvestingPro analysis.

Aletheia Capital projects Google’s ASIC server deployments (Ghostfish & Zebrafish) will increase significantly in both units and content value from 2026-2027, potentially doubling Celestica’s enterprise revenue in fiscal year 2026 and adding another 50% growth in fiscal year 2027.

The firm expects Celestica’s networking business to benefit from 800Gbps switch upgrades for AI infrastructure at Amazon and Google, with communication sales potentially tripling to $12.6 billion by fiscal year 2027 from fiscal year 2024.

Aletheia Capital forecasts Celestica’s earnings per share to triple from fiscal year 2025 to fiscal year 2027, setting its $350 target price at 25 times fiscal year 2027 estimated price-to-earnings ratio, which includes a 20% premium over fair value due to the company’s market position and growth prospects. The current analyst consensus is bullish, with price targets ranging from $208 to $300.

In other recent news, Celestica Inc. reported impressive second-quarter 2025 financial results, exceeding analysts’ expectations. The company achieved an adjusted earnings per share of $1.39, surpassing the projected $1.23, and recorded revenue of $2.89 billion, which was 8.24% higher than the anticipated $2.67 billion. Following these results, Celestica raised its full-year guidance, forecasting revenue of $11.55 billion and an adjusted EPS of $5.50. In addition to these financial achievements, Celestica introduced two new 1.6TbE data center switches aimed at AI applications, which double the capacity of its existing solutions.

Furthermore, RBC Capital and Stifel both increased their price targets for Celestica, citing strong demand from hyperscalers and AI applications. RBC Capital raised its target from $185.00 to $225.00, while Stifel increased its target from $150.00 to $230.00, both maintaining positive ratings on the stock. Additionally, Celestica announced the appointment of Chris Colpitts to its Board of Directors, bringing extensive experience from the technology and investment sectors. These developments reflect ongoing growth and strategic advancements at Celestica.

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