Celestica (CLS)
Electronics manufacturing services (Celestica) — builds hyperscaler AI hardware (ODM)
AI exposure 57% — derived from reported segment revenue, not asserted.
Where it sits
Connectivity → EMS / ODM · figures rebased to Q2 2026, reported 2026-07-27
Communications — builds networking switches/routers for hyperscalers (800G) leads 4 businesses in this sub-tier that together are 99% of revenue, so EMS / ODM is effectively the whole company rather than one leg of it.
Reported segments
- Connectivity & Cloud Solutions (CCS) — 74% of revenue
- Advanced Technology Solutions (ATS) — 26% of revenue
Celestica ($12.2B 2025E) is an EMS/ODM contract manufacturer — its IDENTITY and 100% of revenue is contract manufacturing. It BUILDS products others design (networking for hyperscalers, servers, storage, A&D systems). So ALL businesses map to B3 EMS/ODM (primary, ~74% CCS + 26% ATS). The end-PRODUCTS it builds (networking switches, AI servers) are captured as CAPABILITY TAGS (B3 Switching, B2 Storage&Server) showing exposure — NOT as competitive placements (CLS does not compete with switch/server makers; it builds for them). This resolves the earlier contradiction (57% networking was wrongly…
How the 57% is built
- Connectivity & Cloud Solutions (CCS) — 74% of revenue × 75% AI-driven (estimate). Estimate. Raised from 70 because HPS alone was ~40% of total company revenue in Q2 2026 (+58% YoY) and sits entirely inside CCS — that is ~54% of the segment before counting non-HPS hyperscaler server and switch volume — while CCS grew 84% YoY on AI networking and rack-scale programs. Note the spine's 74% revPct is…
- Advanced Technology Solutions (ATS) — 26% of revenue × 5% AI-driven (estimate). Estimate, unchanged. Aerospace/defense, industrial and healthtech programs have little AI-data-center overlap; ATS margin 6.3% versus CCS 8.7% reflects the different mix
Investment read
Moat. EMS/ODM scale plus a genuine hyperscaler co-design franchise — HPS was ~$1.9B in Q2 2026 (+58% YoY, ~40% of revenue). Co-design creates real mid-program switching costs, but they are program-level, not company-level: the customer re-decides at each refresh.
Bottleneck / pricing power. Thin but structurally improving: a record 8.2% adjusted operating margin and 55.5% adjusted ROIC in Q2 2026 as rack-scale and HPS mix rises. Still manufacturing services — the margin is earned on execution, not extracted from position.
Role in the AI stack. The EMS/ODM build layer for hyperscaler custom AI hardware.
Connected companies
- NVIDIA (NVDA) — CLS supplies: server/rack assembly (ODM)
- Jabil (JBL) — CLS competes with: AI-server / cloud infrastructure manufacturing — Jabil outsizes CLS but direct cloud rival
- Flex (FLEX) — CLS competes with: High-complexity cloud infrastructure + JDM/design-led model — direct competitor
- Microsoft (MSFT) — CLS supplies: builds 800G/1.6T networking switches + AI server racks for Microsoft (HPS, ODM/JDM)
- Alphabet (GOOGL) — CLS supplies: builds data-center networking/compute hardware for Google (hyperscaler)
- Amazon (AMZN) — CLS supplies: builds AI server/networking hardware for Amazon (hyperscaler)
- Meta Platforms (META) — CLS supplies: builds data-center hardware for Meta (hyperscaler)
- Advanced Micro Devices (AMD) — CLS is supplied by: Instinct/EPYC silicon for Celestica-built AI servers
- Broadcom (AVGO) — CLS is supplied by: Tomahawk/Jericho switch silicon for Celestica-built 800G/1.6T switches
- Oracle (ORCL) — CLS supplies: builds AI networking/servers for ORCL AI data centers
- CoreWeave (CRWV) — CLS supplies: possible ODM networking/server supply; Celestica's named-scale customers are the large hyperscalers
Others in EMS / ODM
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