Celestica guided 2027 revenue to $40 billion, nearly double this year; the stock is less than half its high

Celestica▲+1.51% — Celestica, up 1.51 percent today has promised investors a doubling, and the market has cut the stock to less than half its high. On October 26 the Toronto manufacturer, which assembles AI racks and networking gear for the giant cloud operators, guided 2027 revenue to $40 billion↗, nearly double the $21 billion it now expects for this year ¹. The shares jumped 12.6% when the guide landed ², then fell 9.18% in Toronto on November 4 ³. They opened Friday in New York at $206.77, against a 52-week high of $474.02 ⁴.

Analysts have not followed the price down. The consensus target still sits at $453.32, and Wall Street Zen upgraded the shares to Buy on Saturday ⁴. Between that target and the traded price sits the question the report left open: a company can hold the orders and still lack the cash to build them. Who pays for the parts before the customers pay for finished racks?

The demand is observable down to the racks

Third-quarter revenue was $5.83 billion, up 83%, at an adjusted operating margin of 8.5%, a company record ¹. The hyperscaler unit, Connectivity & Cloud Solutions, more than doubled to $4.87 billion↗, roughly 84% of the quarter ⁵. The programs behind it are named.

Celestica calls itself a preferred manufacturing partner for Google's data-center hardware and is expanding US capacity for systems built around the Tensor Processing Unit, Google's▲+1.01% — Google, up 1.01 percent today custom AI chip ². Separately, it is ramping racks and circuit boards for OpenAI's Jalapeño accelerator↗, a chip OpenAIPVT$1.18T — OpenAI, private, latest valuation $1.18T designed with Broadcom▲+1.05% — Broadcom, up 1.05 percent today ². Chief executive Rob Mionis says customer demand forecasts for 2028 run meaningfully higher than the 2027 outlook ¹.

The cash leaves before the revenue arrives

A rack maker buys components months before a hyperscaler pays for finished racks, and at 90% growth that gap becomes the business ¹⁶. Inventory has more than doubled since December, to $4.5 billion at the end of September ¹⁶.

Celestica cut its 2026 free-cash outlook to $460 million, from $600 million, and called the difference working capital, cash tied up in parts and inventory, parked ahead of the 2027 ramp ¹. The parking was funded by a $3.45 billion share sale completed in August; we reported both the sale and the cut on October 31 ¹.

Next year gets heavier. Management told its October 27 earnings call to expect a net use of cash in 2027, with capital spending of $1.5 to $2 billion ². One customer was 35% of quarterly revenue, and the ten largest together were 85% ². Insiders sold about $24 million of stock over the past quarter, among them Mionis, who sold 23,496 shares in August at an average of $362, before the slide ⁴. The doubling is being built for a handful of customers whose schedules Celestica does not control.

What the discount is asking

Nothing in the record pins the slide on any single cause. Thursday was a sector rout: the Nasdaq 100 fell 6.4%, its worst day since 2020↗, after Democratic midterm wins in key data-center states stoked fears of slower AI construction ⁷. The orders in this report are nonetheless documented, and the margin outlook held, which leaves the cash call as the exposure still being priced: deposits from customers arriving before components are bought, or more equity sold into a falling market.

The tell will be in the next balance sheet. Customer cash arriving ahead of component orders would mean the doubling is financed by the people who ordered it. Until a filing shows that, the advancing is being done by Celestica's shareholders, and this week they marked down the price at which they will do it.