Celestica Inc. (CLS) Its price grew by around 400% in one year.

This performance can be attributed to several factors, including strong revenue growth and the company's focus on delivering AI computing programs to hyperscalers (like Google, Meta, Amazon, Microsoft).

Celestica has recognized the growing demand for AI custom computing solutions and has strategically positioned itself in this market. As hyperscalers continue to expand their AI capabilities, the need for specialized hardware systems has rapidly increased.

The company's expertise in custom silicon solutions and its ability to build custom AI hardware platforms has made it a key player in providing solutions to hyperscalers.

With its global production and distribution network, Celestica meets hyperscaler needs efficiently. This scalability is a competitive advantage that sets it apart from others.

According to the first quarter results reported by the company;

Total revenue of $2.2 billion increased +7.8% quarterly / +20.2% annually, while total operating margin of 6.2% increased +0.2 points quarterly / +1 point annually and 0 It reported +22.8% quarterly/+82.9% annual adjusted earnings per share of $.86. Free cash flow exceeded expectations, reaching $65 million.

Celestica continues to improve its margins. The high-margin CCS (Customized Compute Solutions) segment plays a significant role in operating margin improvements. Additionally, this segment is the primary driver of Celestica's revenue growth, growing at an impressive 38% year-over-year.

The company increased its revenue expectation for 2024 from $8.5 billion to $9.1 billion, indicating a 15% increase compared to the previous year.

Despite this positive outlook, there is also a belief that Celestica remains conservative in its projections and could exceed its 2024 expectations.

Encouraging signals from the management team, coupled with strong dynamics in the AI ​​custom compute market and solid hardware demand from hyperscalers, are contributing to this optimism.

My comment: The company's EPS is expected to grow 36.4% this year, which is well above the industry average of -6.1% EPS growth.

The company's annualized cash flow growth rate has been 19.2% over the last 3-5 years, while the industry average is 9.2%. For this not-so-mature company, a good cash flow will allow it to focus on new projects without the need to obtain funding.

I find its financial performance fascinating.

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