Celestica Q2: The HPS Engine Should Drive Another Beat

Summary

  • Celestica's Q2 consensus remains conservative despite robust Q1 results, setting the stage for another potential earnings beat as AI-driven demand accelerates.
  • The company's HPS networking products, now nearly 40% of revenue, continue to fuel higher-margin growth and support management's optimistic full-year guidance.
  • Street estimates for Q2 EPS and revenue have barely budged, even as CLS's track record shows consistent outperformance and upward guidance revisions.
  • Risks include hyperscaler CapEx volatility and tariff impacts, but the company's diversified supply chain and cost pass-throughs help mitigate these concerns.
  • With AI infrastructure demand strong and valuation still reasonable, I maintain a 'Buy' rating, expecting Q2 to reinforce Celestica's leadership in the sector.

Entrance of Celestica Inc. in Newmarket, Ontario, Canada.

JHVEPhoto

Intro and Thesis

If you read my articles regularly, you probably know that I've been covering Celestica (NYSE:CLS) stock for a while, mostly rating it with "Buys" along its way up. In April 2025, when I

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This article was written by

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Daniel Sereda is chief investment analyst at a family office whose investments span continents and diverse asset classes. This requires him to navigate through a plethora of information on a daily basis. His expertise is in filtering this wealth of data to extract the most critical ideas. He runs the investing group Beyond the Wall Investing in which he provides access to the same information that institutional market participants prioritize in their analysis. Learn more.

Analyst’s Disclosure:I/we have a beneficial long position in the shares of CLS either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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