CLS Stock Rises Because of AI Demand, But Is It Too Expensive?

July 29, 2025: Celestica (NYSE:CLS) has had an amazing run. Its CLS stock has gone up 80% this year and more than tripled in value over the previous year. A big part of this growth is due to a big rise in demand for cloud infrastructure and AI-powered networking equipment, which is being pushed by big IT businesses.

The Connectivity & Cloud Solutions (CCS) section of the corporation, which is known for making electronics and providing supply chain services, is growing quickly. In the first quarter of 2025, this segment, which comprises servers, storage, and high-performance networking hardware, made $1.84 billion, which is 28% more than the same time last year. CCS’s key AI-related products, namely servers, integrated rack solutions, and high-performance networking switches, are very important for running modern AI workloads.

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This demand is likely to stay strong because of the continuous AI boom. Amazon is expected to spend up to $105 billion on infrastructure in 2025, which is a record amount for a major internet company. Microsoft, Alphabet, and Meta are expected to spend $80 billion, $75 billion, and $72 billion, respectively, with a large part of that going toward AI infrastructure. This trend is good news for Celestica’s future demand.

Even though the stock has done well, its fundamentals imply that it is rather expensive at its present price of about $170, which could make it a costly buy. There are some small issues about CLS stock, but when you look at important measures like Growth, Profitability, Financial Stability, and Downturn Resilience, it becomes clear that Celestica has great operational performance and financial health. The Trefis High Quality portfolio is an option for investors who want to make money with less risk than individual equities. It has outperformed the S&P 500 and has returned more than 91% since it started.