Celestica (CLS) Stock Forecast & Price Target

Celestica is benefiting from a structural shift toward design-led platform solutions, with Hardware Platform Solutions rising to $1.9B in FQ2 2026, 41% of revenue, and likely carrying the highest gross margin in the business. Its core AI infrastructure franchises are also compounding, as it holds about 41% of 200G-plus Ethernet ports and 55% of custom switch spend while custom AI accelerator exposure drives the Enterprise compute ramp. The investment case is reinforced by six straight quarters of accelerating growth and record margins, including FQ2 2026 revenue up 62% year over year, NG operating margin of 8.2%, and raised FY2026 revenue guidance to roughly $20.5B.

Celestica is vulnerable to an unfavorable mix shift because its fastest-growing AI/compute and non-HPS CCS programs are lower-margin than the company average, leaving NG GM% flat to down at 11.5% in FQ2 2026 after peaking at 11.7% in mid-2025. Celestica is also highly exposed to a small set of hyperscalers, with three customers representing 63% of FQ2 2026 revenue and the top ten reaching 79% of FY2025 revenue, while share is won on execution each generation rather than locked in by volume commitments. Celestica is facing supply-chain and working-capital risk because networking silicon and memory lead times remain beyond 52 weeks, inventory has climbed to $3.40B with turns slipping to 5.4x, and the August equity raise increased dilution just as capex and lower-margin consigned programs threaten free-cash-flow quality.