Barclays says this little-known electronics stock is primed for even more gains ahead thanks to AI

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Barclays says this little-known electronics stock is primed for even more gains ahead thanks to AI

Artificial intelligence tailwinds could mean more gains ahead for Celestica , according to Barclays. The investment bank initiated coverage on the stock with an overweight rating, and its price target of $91 implies nearly 26% upside from Monday’s close. Pointing to the company’s custom chip products for hyperscale data centers, analyst George Wang thinks the company is poised to benefit from the growth in that area over the next few years. With that, he expects Celestica’s revenue associated with hyperscalers to reach $4.8 billion — accounting for half of its total revenues. “Celestica is uniquely positioned to enable hyperscale data centers with switch and compute needs and meet the growing demands of [artificial intelligence/machine learning],” the analyst wrote in a note to clients on Tuesday. “We see continued margin expansion driven by [Hardware Platform Solutions] products.” Not only that, Celestica’s gains are bolstered by an upcoming upgrade cycle in hyperscaler bandwidth technology, which is where the company already has a leading market share, Wang also said. “CLS is strongly positioned in the 800G upgrade cycle, enabling hyperscaler customers to transition from 400G to 800G,” he continued. “We estimate HPS ethernet switch revenue to approach $4 billion for 2025, led by switching for

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, where CLS has 50-75% share for higher speed switching based on our estimates and checks.” CLS YTD mountain CLS, year-to-date Shares of the company have been on a massive rally this year, as the stock has gained more than 159%. It’s also surged more than 37% in the past one month.

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