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Celestica (TSX:CLS) Is Up 20.0% After Boosting Outlook on Key Broadcom-OpenAI Chip Deal

Simply Wall St · 09/11/2025 14:32
  • In September 2025, Celestica raised its full-year 2025 revenue growth outlook after Broadcom announced a US$10-billion chip supply deal with OpenAI, highlighting Celestica's role as a key manufacturing and supply chain partner to industry leaders in AI infrastructure.
  • This development underscores Celestica's growing significance in the surging AI infrastructure space, strengthened by robust demand from hyperscale customers and expanding opportunities in networking and cloud solutions.
  • Given Celestica's pivotal role in Broadcom's collaboration with OpenAI, we'll explore how this partnership influences the company's growth outlook and risk profile.

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Celestica Investment Narrative Recap

To be a Celestica shareholder today, you need to believe in the ongoing expansion of AI infrastructure and the company's ability to maintain and grow its relationships with hyperscale clients. The Broadcom–OpenAI chip supply deal highlights Celestica’s influence in powering next-generation AI systems and further energizes a primary short-term growth catalyst, increased hyperscaler demand. However, this only intensifies the company’s largest risk: heavy customer concentration, which could lead to earnings volatility if any top customers shift spending or suppliers.

Among recent announcements, Celestica’s raised full-year 2025 revenue outlook is most relevant, reflecting immediate benefits from strengthening demand and the impact of partnerships like those with Broadcom. While such momentum supports confidence in the company’s growth catalysts, it simultaneously increases exposure to market swings tied to hyperscaler investment cycles.

By contrast, investors should be mindful that even with breakthrough deals, reliance on a small set of large customers introduces risk if just one decides to...

Read the full narrative on Celestica (it's free!)

Celestica's outlook anticipates $17.4 billion in revenue and $992.0 million in earnings by 2028. This scenario assumes a 17.9% annual revenue growth rate and an earnings increase of $453.6 million from the current $538.4 million level.

Uncover how Celestica's forecasts yield a CA$311.34 fair value, a 11% downside to its current price.

Exploring Other Perspectives

TSX:CLS Community Fair Values as at Sep 2025
TSX:CLS Community Fair Values as at Sep 2025

Twelve fair value estimates from the Simply Wall St Community cover a wide range, from CA$145.97 to CA$332.38. As members weigh rapid AI infrastructure demand against significant customer concentration risk, consider how your own expectations align with this broad spectrum of views.

Explore 12 other fair value estimates on Celestica - why the stock might be worth as much as CA$332.38!

Build Your Own Celestica Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

  • A great starting point for your Celestica research is our analysis highlighting 2 key rewards that could impact your investment decision.
  • Our free Celestica research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Celestica's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.