Celestica Shares Tumble 13% Post-Earnings as AI Hype Fails to Lift Stock

Shares of electronics manufacturing services provider Celestica Inc. (NYSE: CLS) fell sharply on Thursday, ending a four-day rally and closing down 13.1% at $300. The decline came immediately after the company released robust full-year 2025 earnings, suggesting that the market had already anticipated the strong performance driven by soaring demand for artificial intelligence infrastructure.

The Toronto-based company reported net income of $832.5 million for the full year 2025, a staggering 94% increase from the $428 million recorded in 2024. Fourth-quarter net income alone reached $267.5 million, up 76% year-over-year. Revenue followed a similar upward trajectory, climbing 28% to $12.39 billion for the year, with Q4 revenue at $3.65 billion.

Buoyed by these results and continued demand for AI data center hardware, Celestica's management issued an optimistic forecast for the coming year. The company raised its 2026 revenue outlook to $17 billion and projected adjusted earnings per share of $8.75. CEO Rob Mionis emphasized the company's strategic alignment with major clients on long-term AI infrastructure plans, announcing a planned $1 billion capital investment for the year, to be funded organically through operating cash flow.

Analysts point to a classic case of "buy the rumor, sell the news" for Thursday's sell-off. Celestica's stock had risen approximately 40% over the preceding four months, largely on expectations that it would be a prime beneficiary of the AI hardware build-out. When the confirmed numbers, though impressive, merely met those heightened expectations, profit-taking ensued.

"The results were stellar, but the valuation had simply run too far, too fast," said market analyst David Chen of Horizon Capital. "The guidance for 2026 is aggressive, and while achievable, it leaves little room for error in a sector where supply chain and customer concentration risks are ever-present."

Investor Reactions: A Mix of Confidence and Caution

The sharp pullback sparked varied reactions from the investment community:

• Michael Rodriguez, Portfolio Manager: "This is a healthy correction in a long-term growth story. The fundamentals are stronger than ever, and the $1 billion in planned CAPEX shows management's confidence. I'm using this dip to add to my position."
• Sarah Jensen, Retail Investor: "It's frustrating. The company does everything right—blows out earnings, raises guidance—and the stock gets hammered. It feels like the market is rigged against the little guy. The AI narrative is being used to pump and dump these stocks."
• Arjun Mehta, Technology Sector Analyst: "The drop highlights the dichotomy in the AI trade. While demand is real, competition among suppliers is intensifying, and margins will be the next battleground. Celestica's outlook assumes a flawless execution cycle."

The event underscores the volatile nature of investing in the AI supply chain, where even exceptional operational performance can be overshadowed by prior market exuberance. Celestica's journey will be a key test of whether hardware enablers can sustain their premium valuations beyond the initial hype phase.