Celestica's AI Hardware Boom: Growth, Margins, And Market Mispricing

Celestica is successfully transitioning from low-margin EMS to higher-margin ODM, driving margin expansion and a stronger investment case. HPS revenue mix rose to 42% in Q1 FY26, up 400 bps sequentially, directly boosting adjusted operating margins and supporting a higher valuation. CLS is positioned for further margin gains with leading-edge HPS products, including 1.6T and 3.2T CPO switches, ramping in late 2026 and 2027.