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UBS upgrades rating to “Buy”! Computing hardware company Celestica (CLS.US) receives collective bullish outlook from Wall Street, with EPS compound growth expected to reach 50% in the next two years.

UBS upgrades rating to “Buy”! Computing hardware company Celestica (CLS.US) receives collective bullish outlook from Wall Street, with EPS compound growth expected to reach 50% in the next two years.

智通财经智通财经2026/08/25 07:16
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Computing power and data center hardware manufacturing giant Celestica (CLS.US) has recently once again become the focus of major Wall Street institutions.

According to Jinse Finance APP, driven by the accelerated global construction of artificial intelligence infrastructure, computing power and data center hardware manufacturing giant Celestica (CLS.US) has recently regained the focus of major Wall Street institutions. As hyperscale clients rapidly upgrade their data centers to higher throughput architectures, analysts have significantly raised their earnings outlook for this key "water seller".

UBS analyst David Vogt, in his latest research report, raised Celestica's stock rating directly from "Neutral" to "Buy", and increased the target price from $410 to $430.

UBS pointed out that demand for Ethernet switches and AI/ML computing hardware is extremely strong. More importantly, Celestica's custom 1.6T rack-level solution for leading AI firms such as OpenAI will be the core driver of the company's medium- and long-term revenue and profit growth. UBS conservatively predicts that with strong order support, Celestica's calendar year 2026 to 2028 (CY26-CY28) earnings per share (EPS) compound annual growth rate (CAGR) will reach nearly 50%, with EPS expected to climb from $10.83 in CY26 to $24.72 in CY28.

Intensive bullish calls from investment banks within one month

Aside from UBS, many major institutions on Wall Street have also released recent reports, showing an overall trend of “optimism toward long-term growth, closely watching short-term capital movements” regarding Celestica. PriceTargets data shows that among the current 23 covering institutions, 20 rate it "Buy", 1 "Strong Buy", 2 "Hold", and none rate it "Sell"; the average target price is $438.86, with the highest forecast at $510 and the lowest at $300, and the consensus rating is "Buy".

JPMorgan, Wolfe Research and others maintain high target prices ($475 and $485), emphasizing that cloud providers’ capital expenditures on 800G and 1.6T network infrastructures are exceeding expectations, and as a core manufacturing partner, Celestica directly benefits from industry growth.

Barclays analyst Tim Long maintains an “Overweight” rating, but slightly lowered his target price from $430 to $406 in early August. The firm believes this minor adjustment mainly reflects a rational assessment of the recent pace of the chip supply chain and the digestion period for short-term industry spending, and does not affect the fundamental logic.

Core of the bullish consensus: fulfillment of AI infrastructure orders

Wall Street's collective bullishness is remarkably consistent — the multi-year boom in AI data center capital expenditures is being translated into substantial orders and earnings upgrades for CLS:

First, rapid growth in high-speed network hardware. Hyperscale cloud providers like Meta and Amazon continue to show strong demand for Ethernet switches, and CLS, as a core hardware OEM, is directly benefited.

Second, breakthroughs in AI-dedicated computing hardware. The company's 1.6T rack-level solution supplied to OpenAI is seen as the key driver for accelerated EPS growth beyond 2027, with UBS projecting a compound annual revenue growth of around 39% up to 2029, "with further upside potential".

Third, financial flexibility has strengthened. TD Cowen noted that after recent equity financing, CLS’s balance sheet has been significantly fortified, fully preparing for the challenging supply chain environment of fiscal year 2027. Management has sufficient room to respond to potential disruptions and effectively compete with major Asian original design manufacturers (ODM) with deep pockets.

Celestica completed a $3 billion common stock issuance plan in early August, aimed at global capacity expansion. Underwriters such as Citi and TD Securities analyzed that the issuance brought temporary equity dilution and stock price volatility, but combining self-financing and equity financing enables Celestica to secure long-term orders from hyperscale clients in the coming years, accelerating the market’s valuation shift from traditional contract manufacturing (EMS) to a high-barrier “AI network and computing power solutions provider”.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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