Celestica sold nearly 10% of itself to build AI racks for OpenAI and AMD

Shareholders bought the factory

On 5 August, Celestica priced 9.68 million new shares at $310↗, and with the overallotment the finished raise came to $3.45 billion ¹². The share count grew nearly 10% ³. The market's first verdict was a cold shoulder: the stock spent the following month as one of the weaker AI-linked names ².

Management promises 2027 will grow faster than 2026's 65%

On its July call, management lifted 2026 guidance to $20.5 billion of revenue and $11.30 of adjusted EPS↗, and said 2027 growth should exceed this year's 65% pace ⁴. The engines are named: ten 1.6-terabit switch programs, first custom rack deliveries to OpenAI late this year, and an AMD Helios ramp in the first half of 2027, each billed as multi-billion-dollar ⁴.

Capex now outruns the cash the business generates

Net proceeds from the August sale are earmarked for working capital and capital expenditure ⁵. Capex guidance for 2026 holds at $1 billion, against $600 million of guided free cash flow ⁴. A year ago, a quarter's capex was $37 million; in June it was $264 million, while quarterly free cash flow stalled near $150 million ⁶.

AMD and OpenAI get lines they will never own

AMD gets a committed design and manufacturing partner for its Helios scale-up switch, OpenAI gets rack assembly, and neither owns a factory ⁴. Broadcom says OpenAI's first custom accelerator, Jalapeño, shipped in its latest quarter, with about 1.3 gigawatts of those systems planned for 2027 ². The invoice lands on Celestica's shareholders.

Customers locked in silicon; OpenAI's cheque is still an IOU

Some risk does flow upstream: customers have placed non-cancelable, non-refundable orders for long-lead silicon ⁴. The multiple is not stretched either, at 18.76 times forward earnings against an industry forward average of 29.46, on 56.66% expected annual revenue growth ⁷. But nothing in Celestica's own releases or the coverage around them says how OpenAI funds its 2027-28 rack commitments; of the named payers behind the 65% promise, it is the least documented. The bull base case for 2027 is $31 billion of revenue, $16 of adjusted EPS and a $450 target ³.

October's Q3 report is the first audit of the 65% promise

Shares were quoted at $372.62 on 25 September ⁸ and $356.53 by the 28th ³. Flex just agreed to pay $4.4 billion for power-gear maker EPC Power↗ for the same reason ⁹: the physical layer of the AI buildout is migrating onto contract manufacturers' balance sheets. Celestica's third-quarter report lands in October, the first hard count of whether 65% survives contact with an income statement.