Celestica Sees $40 Billion in 2027 as Reports Begin

TORONTO, Oct. 26 — Celestica,Celestica, which builds network switches and servers for cloud companies and AI labs, said on Monday that it expects revenue of $40.0 billion next year, up 90 percent, and that its customers’ demand forecasts for 2028 are “meaningfully higher” still. It raised its outlook for this year to $21.0 billion, from $20.5 billion.

Its shares closed Monday at $246.65, down 5.14 percent, before the report. In after-hours trading they were at $288.05 at about 8 p.m. Eastern, 16.8 percent above the close.Before the ReportMonday’s close was Celestica’s lowest close in a year: 19 percent below its close of Oct. 21, and 48 percent below its highest close this year, $472.40 on June 2.

The outlook, Celestica’s first figures for 2027, is a supplier’s read on next year’s AI build-out, and it arrives as the cloud companies begin to report: Alphabet and Microsoft on Wednesday, Amazon on Thursday. Celestica does not name its customers, and much rides on a few. Three, all in its Connectivity & Cloud Solutions segment, accounted for 35, 17 and 14 percent of third-quarter revenue, its quarterly report shows, and its 10 largest for 85 percent.A Year EarlierIn the third quarter of 2025, the three largest accounted for 30, 15 and 14 percent of revenue, and the top 10 for 80 percent.

“Celestica is well-positioned to continue to support leading hyperscalers and frontier AI labs through the ongoing AI infrastructure supercycle,” Rob Mionis, its chairman and chief executive, said in the release. “The demand environment continues to be very robust, supporting our 2027 revenue outlook, with customer demand forecasts meaningfully higher for 2028.”

The demand environment continues to be very robust, supporting our 2027 revenue outlook, with customer demand forecasts meaningfully higher for 2028.

The Quarter

Third-quarter revenue was $5.83 billion, up 83 percent from a year earlier and above the top of the company’s own forecast range, $5.25 billion to $5.55 billion. Adjusted earnings, which leave out stock-based pay and some other items, were $3.30 a share, up 109 percent; by standard accounting, $3.26, against $2.31 a year earlier.

Revenue in the Connectivity & Cloud Solutions segment rose 102 percent, to $4.87 billion. Within it, sales of servers and storage rose 242 percent, “driven by the continued growth in hyperscaler AI compute volumes,” the quarterly report says, and networking rose 68 percent on demand for data-center switches.

For 2027, Celestica also expects adjusted earnings of $21.50 a share, an adjusted operating margin of 9.0 percent, which it calls a record, and capital spending of $1.5 billion to $2.0 billion. In July it had said only that growth in 2027 would “accelerate beyond the 65% growth rate” it expected this year. That would be more than three times its 2025 revenue of $12.39 billion.

The growth will take cash first: Celestica cut its forecast of this year’s free cash flow to $460 million, from $600 million, to put more into working capital for 2027, and its quarterly report says it expects “a net use of cash in 2027.”Free Cash FlowCelestica defines it as cash from operations less purchases of property, plant and equipment, net of proceeds from sales of certain surplus assets. It was $412.5 million in the first nine months of 2026. Inventories stood at $4.51 billion on Sept. 30, more than twice the $2.19 billion at the end of 2025.

In August it sold 11.1 million new shares at $310 each, raising $3.45 billion before costs; Monday’s close was 20 percent below that price. The same report cautions that “the long-term trajectory of AI adoption and related data center deployment is uncertain.”

The Markets

Three other suppliers reported Monday after the close. Cadence, whose software is used to design chips, raised its 2026 revenue forecast to $6.387 billion to $6.417 billion, growth of about 21 percent, after third-quarter revenue of $1.633 billion and a record backlog of $8.2 billion. Rambus, which sells chips and licenses its designs, reported record revenue of $218.3 million and forecast $227 million to $233 million for the fourth quarter. Amkor, which packages and tests chips, had net sales of $1.99 billion; computing, which includes data centers, rose to 26 percent of sales from 19 percent a year earlier, and communications, chiefly smartphones and tablets, fell to 37 percent from 51.

Chip stocks helped lift the market on Monday: the PHLX Semiconductor index rose 2.82 percent, to 11,083.47, though it is still down 12.2 percent for October. Reuters credited Anthropic’s filing for a public offering, which “helped boost sentiment in AI-related stocks.” Nvidia rose 2.39 percent, to $216.00.NVDANasdaq204.64▼9.02−4.2%Nvidia · Friday’s session

In Seoul on Tuesday the Kospi rose 3.09 percent, to 5,638.34, as SK hynix gained 5.18 percent and Samsung Electronics 4.23 percent before their results this week. Investor sentiment improved after Anthropic “disclosed strong revenue growth” in its filing, Yonhap reported. In Tokyo, Advantest, a maker of testing equipment, rose 8.98 percent and Tokyo Electron 3.07 percent; the Nikkei 225 gained 1.73 percent. Mainland Chinese chip shares fell: Cambricon and Hygon each lost more than 5.5 percent in Shanghai, and the CSI Semiconductor Industry index fell nearly 6 percent, to its lowest since April, investingLive reported.

The Week

On Tuesday after the market closes, NXP Semiconductors, Teradyne, which makes test equipment for chips, and Seagate report. SK hynix holds its call on third-quarter results at 9 a.m. Wednesday in Seoul, 8 p.m. Tuesday in New York. GE Vernova, the energy company, and Vertiv, which sells power and cooling equipment for data centers, report on Wednesday before the open.

The Federal Reserve announces its rate decision at 2 p.m. on Wednesday, after raising its target range to 3.75 to 4 percent on Sept. 16; markets priced a 12.7 percent chance of another rise, Reuters reported Monday, citing CME FedWatch. Alphabet, with a call at 4:30 p.m., and Microsoft report on Wednesday. Samsung Electronics holds its call at 10 a.m. Thursday in Seoul, 9 p.m. Wednesday in New York, and Amazon follows on Thursday, with a call at 5 p.m. Eastern.

Celestica’s call and investor day begin at 8 a.m. Eastern on Tuesday, before the market opens; the cloud companies’ results that follow, Reuters wrote, “will be parsed for signs of whether the hefty AI investments are translating into growth.” Its outlook, the release says, assumes its customers’ indications of future demand are reliable.