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The Supplier Nobody Mentioned When Dell Hit an All-Time High

Friday was a Dell story. Everyone knew it the moment Trump said “Go out and buy a Dell” at a White House event and the stock gapped up 13% into record territory. Impressive. Hard to argue with a presidential endorsement.

But here’s the thing — when a company like Dell goes parabolic on the back of AI server demand and America First momentum, the smarter question isn’t whether to chase the headline name. It’s who’s sitting quietly behind it, building the infrastructure that makes the whole thing possible.

One name worth knowing: Celestica Inc. (NYSE: CLS).

What Celestica Actually Does

Celestica is an electronics manufacturing services company – but that description undersells it badly. This isn’t a contract assembler bolting parts together in a warehouse. Over the past several years, the company has made a deliberate pivot toward high-value engineering: designing and building the advanced networking systems, AI compute platforms, and thermal management solutions that go inside the most demanding data center infrastructure on the planet.

Its customers include the top hyperscalers – Amazon, Microsoft, Alphabet, Meta, and likely Apple. And it has a strategic collaboration with AMD specifically for the development of a rack-scale AI platform called Helios. That’s not a vendor relationship. That’s a design partnership.

Slight tangent, but it matters: Broadcom CEO Hock Tan has publicly described Celestica as “our preferred provider for our most technically demanding data center platform solutions.” When one of the most powerful semiconductor executives in the world calls you out by name like that, people should probably pay attention.

The Numbers Are Hard to Ignore

Q1 2026 revenue hit $4.05 billion — up 53% year-over-year. That’s not a rounding error. That’s a company operating in a genuine demand surge. The Connectivity & Cloud Solutions segment, which is the AI-facing engine of the business, was the primary driver. Full-year 2025 revenue came in at $12.39 billion, up roughly 28% from the prior year, with earnings nearly doubling — up 94.5%.

Management raised full-year 2026 guidance to $17.0 billion in revenue with adjusted EPS of $8.75. For context, Wall Street had been modeling $14.1 billion heading into the Q3 2025 report. They blew past that. Then raised again. The guidance keeps moving higher because the demand environment — Celestica’s own words — “continues to strengthen.”

• Q1 2026 Revenue: $4.05B (+53% YoY)
• FY2025 Revenue: $12.39B (+28% YoY)
• FY2026 Guidance: $17.0B revenue, $8.75 adjusted EPS
• HPS Revenue (AI servers/storage): Up 79% YoY in Q3 2025, 82% in Q2 2025
• Analyst Consensus: Strong Buy — 16 analysts, avg. price target ~$407

Barclays recently set a $441 price target. Citi has $415. TD Securities upgraded to Buy with a $430 target, specifically calling a post-earnings dip an “opportunistic entry point.” The stock is trading around $377 as of today.

Why the America First Angle Matters Here

Dell’s Friday move wasn’t just about one presidential comment. It was the culmination of a week that included analyst upgrades, sector validation from Super Micro, and a broader AI infrastructure rally. The macro narrative is clear: domestic AI buildout is being pushed — politically and commercially — as a national priority.

Celestica is actively expanding North American manufacturing capacity to support AI infrastructure customers. That’s not a coincidence. It’s a strategic alignment with exactly the kind of onshoring and domestic supply chain resilience that the current administration has been vocally championing. Companies that can credibly say their production is happening on this continent — and that they’re investing to deepen it — have a very different conversation with the White House than pure offshore assemblers.

What’s interesting is that Celestica holds roughly 41% market share in advanced 200G+ Ethernet switches — the high-speed networking gear that AI clusters absolutely depend on. And it just announced its DS6000-series 1.6 terabit switches are available for order to initial customers. That’s the next generation of AI networking, and Celestica is one of the few companies that can actually build it at scale.

The Risks — And They’re Real

Customer concentration is the most obvious one. A small number of hyperscalers represent a significant portion of revenue. If even one major customer pulls back or delays an order cycle, the quarterly numbers could disappoint badly — and at a premium valuation, disappointment tends to get punished hard.

The valuation itself deserves scrutiny. The stock’s P/E sits around 46x, and one independent model suggests shares may be trading well above estimated fair value. Celestica has a $1.0 billion capital expenditure plan for 2026 to expand capacity, which is expected to compress free cash flow to roughly $500 million for the year. Necessary investment — but it limits the financial cushion if revenue growth decelerates even slightly.

There’s also execution risk. Scaling at this pace — from a $9.6 billion business in 2024 to a projected $17 billion operation in 2026 — requires flawless program management, supply chain discipline, and the ability to ramp new customer programs on time. Any meaningful slip there would show up in the margins first.

Memory chip price increases are another pressure point across the AI hardware supply chain. Celestica isn’t immune.

The Bigger Picture

Bank of America’s framing of agentic AI is worth sitting with for a moment. The argument is that AI is moving from single-task tools to agents that chain together dozens or hundreds of computational steps per workflow. If that shift plays out, the compute demand per user doesn’t grow linearly — it could multiply. That means more servers, more networking gear, more storage. More of everything Celestica builds.

Dell is projecting $50 billion in AI server revenue for fiscal 2027. It entered fiscal 2027 with a $43 billion backlog still undelivered. The infrastructure has to come from somewhere. The switches, the server chassis, the custom platform solutions — that’s Celestica’s lane. And it has multi-year program visibility into 2027 already locked with its largest customers.

The CEO described it during the Q3 2025 call as navigating “the most rapid period of change in our company’s history.” That’s not marketing language. That’s a company that’s been doing this for 30 years telling you something is genuinely different right now.

Everyone watched Dell on Friday. The stock that may have more room to run — and more fundamental underpinning — could be the one quietly building what Dell sells.

Worth a closer look.

This editorial is for informational purposes only and does not constitute investment advice. All financial data referenced is sourced from publicly available company filings, analyst reports, and market data as of May 9, 2026. Investing involves risk. Past performance is not indicative of future results. Always conduct your own due diligence before making any investment decision.

— The Rising Star Stocks Team