Celestica (TSX:CLS) Could Be 36% Undervalued As AI Growth Drives The Narrative

Celestica (TSX:CLS) recently presented at the OCP APAC Summit 2026 in Taipei, highlighting its role in open compute and data-center hardware. The event provides investors with a timely perspective on the company’s AI infrastructure opportunity. The shares declined 8.38% in one day to CA$431.98 and are down 9.14% over 90 days. Despite that pullback, Celestica’s one-year total shareholder return remains 68.72%, alongside a very large five-year total shareholder return multiple. Investors evaluating comparable exposure may also consider 56 AI infrastructure stocks. The key question is whether the market is still underpricing Celestica’s AI hardware opportunity or whether much of the upside is already reflected in the stock. The most-followed valuation narrative estimates fair value at CA$677.38, compared with the last close of CA$431.98, implying that the shares are 36.2% undervalued. The thesis rests on accelerating demand from hyperscaler customers for advanced networking and AI infrastructure, which is driving rapid growth in Celestica’s CCS segment. Multiple new 800G programs and upcoming 1.6T program ramps are expected to support robust revenue expansion and greater operating leverage over the next 12 to 24 months. Broader digital-transformation initiatives and technology transitions, including AI/ML compute and next-generation racks, are expanding Celestica’s design pipeline among hyperscalers and digital native customers. Deeper engagements could improve revenue visibility and increase revenue potential per customer. The narrative therefore assumes rapid revenue expansion, rising earnings and a leaner profit-margin profile. However, Celestica’s heavy reliance on a few hyperscaler customers and the CCS segment’s dominance create meaningful downside risk. A slowdown in cloud or AI spending could quickly undermine the optimistic valuation case. The CA$677.38 fair value reflects historical data and analyst forecasts, not investment advice or a recommendation to buy or sell. The analysis may not incorporate recent price-sensitive announcements or qualitative information, and Simply Wall St has no position in stocks mentioned.