This Growth Stock Should Be Owned by Every Canadian

Tariffs or not, the artificial intelligence (AI) revolution is forging ahead — and it’s not just about the algorithms or hardware. As AI adoption accelerates, the real backbone is data centres and networking infrastructure. After all, an AI-powered device is just another gadget without internet or cloud connectivity. This has significantly increased demand for network switches, opening up new growth avenues beyond well-known names like Nvidia.

While Nvidia remains the frontrunner in designing AI GPUs, it doesn’t manufacture them. That gap is being filled by third-party electronics manufacturers benefiting from the rising investment in research and development. One such standout is Celestica (TSX:CLS).

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Celestica builds servers, storage systems, and networking gear through its Connectivity & Cloud Solutions (CCS) division, which has become the company’s primary growth driver. It also operates in other industries — including aerospace, health tech, and industrial — through its Advanced Technology Solutions (ATS) segment, but CCS is where the real momentum lies.

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After posting strong double-digit growth in its high-margin Enterprise segment from 2022 to 2024, Celestica’s revenue expansion has slowed but remains solid. The company is forecasting high-teens revenue growth for 2025.

Despite its higher valuation, Celestica stands out due to its focused exposure to AI and cloud infrastructure. In contrast, Flex has broader diversification — spanning automotive, consumer electronics, renewables, and industrial sectors — many of which are currently weighing down its overall revenue growth. Flex is forecasting either flat or mid-single-digit revenue growth, as gains in cloud and networking are offset elsewhere.

In summary, Celestica’s concentrated positioning in AI infrastructure, paired with improved guidance and strong demand tailwinds, make it a compelling choice for investors looking to tap into the next phase of tech growth.