Celestica (Celestica Inventory Quote, Chart, Information, Analysts, Financials NYSE:CLS) continues to profit from highly effective knowledge centre tailwinds, in keeping with Goodreid Funding Counsel VP Julien Nono-Womdim who mentioned the identify on BNN Bloomberg Market Name on Feb. 10.
“We’ve owned Celestica for some time now, finished fairly nicely on it,” Nono-Womdim mentioned. “As we take a look at the corporate immediately, we predict that the tailwinds proceed.”
He pointed first to hyperscaler capital expenditures, noting Celestica’s revenues are “positively correlated with knowledge centre CapEx,” which has been rising meaningfully in latest weeks. He additionally cited an business improve cycle in community change know-how from 800 gigabits to 1.6 terabytes, which he believes will help each income development and margin enlargement.
As well as, Nono-Womdim mentioned the shift from AI coaching workloads to inference — real-world utilization purposes — ought to present one other layer of demand.
“So whereas the valuation is form of elevated from a P/E a number of standpoint, name it 30 occasions, we predict the acceleration in revenues is gonna be overwhelmingly constructive,” he mentioned.
That mentioned, he acknowledged {that a} pullback in hyperscaler spending would have direct implications.
“It actually will, not a ‘might,’ it actually will,” he mentioned when requested whether or not a CapEx slowdown would have an effect on Celestica.
At current, he mentioned it isn’t a priority, but it surely stays a key threat issue his staff is actively monitoring. Quite than ready for formal bulletins, Nono-Womdim mentioned his agency tracks various knowledge and business backlogs to establish early indicators of a slowdown.
“If there’s one factor we’re listening to, it’s that individual inflection, if and when AI spending resolves to the draw back,” he mentioned, including that shares tied to the AI buildout “are going to be punished fairly severely” if spending turns.
Celestica shares have gained 136% over the previous 12 months and three,597% over 5 years. Of the analysts masking the inventory, 20 price it “Purchase,” three “Maintain,” and none “Promote,” with a consensus value goal of US$382.78.
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