U.S. tech shares have dominated the marketplace for years, and Nvidia has develop into the poster little one for that surge. Buyers who loaded up on NVDA have been rewarded, however the commerce has additionally develop into extraordinarily crowded.
When one inventory or sector drives such an enormous share of returns, there’s an actual threat of being depending on a single theme. On this case, that theme is U.S. tech.
Luckily, there are alternatives for Canadian buyers searching for that publicity to the AI buildout with out together with the identical U.S. mega‑cap names. One such possibility for buyers to contemplate proper now’s Celestica (TSX:CLS).
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Why U.S. tech publicity is overloaded
The AI increase we’ve seen in recent times has pushed Nvidia to historic heights. The affect that one inventory has on the broader market has grown simply as rapidly. The truth that NVDA inventory accounts for such a disproportionate share of market good points ought to have seasoned buyers questioning that focus threat.
That threat is actual. And the necessity to diversify is equally vital. Luckily, it’s potential to diversify and stay throughout the broader tech shares theme. Fairly than including extra publicity to U.S. chip giants or software program titans, the choice is to determine firms that may profit from that AI demand, with out as a lot threat.
That’s the place the attraction of Celestica comes into play.
Celestica: The AI {hardware} builder
Celestica doesn’t compete with U.S. tech giants, neither is it a chip designer. The corporate builds the {hardware} techniques which can be leveraged by AI. It manufactures the data-centre infrastructure, servers, and superior electronics for cloud and enterprise prospects.
Briefly, Celestica caters to the bodily layer of AI that connects these hyped-up chips to functioning techniques.
That’s an vital distinction. As AI workload demand continues to develop, so too will the necessity for servers, networking tools, and power-dense {hardware}. Celestica is uniquely positioned to construct these techniques. It’s a unique angle of AI that has sturdy demand and advantages from the tailwinds of Nvidia’s surge.
That progress is obvious. Over the trailing 12-month interval, Celestica’s share worth has surged by over 170%. That even outpaces Nvidia’s sturdy 57% improve over the identical interval.
That’s to not say the inventory is resistant to volatility. Celestica has dipped over the previous month, falling 9%.
The basics haven’t modified. Demand for AI {hardware} stays sturdy, and Celestica continues to win new enterprise as prospects scale up their infrastructure.
Celestica offers buyers publicity to AI infrastructure with out the valuation extremes of U.S. mega‑caps. It’s tied to that development, however its enterprise mannequin is extra grounded in manufacturing, backlog progress, and operational execution. That makes the general threat completely different and extra balanced than that of the excessive‑a number of chip designers driving the market.
Why Celestica is the tech inventory to purchase now
Celestica’s progress runway is tied on to the enlargement of AI knowledge centres. As firms deploy extra GPUs, they want extra techniques integration, extra energy administration, and extra superior {hardware}.
These are the areas the place Celestica has deep experience. The corporate has been executing effectively, enhancing margins and increasing its backlog, which supplies visibility into future income.
By means of instance, let’s have a look at the current quarterly replace. In that replace, Celestica reported income of $3.7 billion. That was a 44% year-over-year enchancment. On an adjusted foundation, which works out to $1.89 per share, that’s up from $1.11 per share final 12 months.
That income progress is predicted to proceed all through 2026 and into 2027. Celestica can also be rising its capital investments to $1 billion for this 12 months, funded fully from working money circulation.
For buyers, the sturdy outcomes and up to date dip present a clear entry level. With AI infrastructure demand accelerating, Celestica is positioned to maintain benefiting over the long term.
Last ideas
Most tech-heavy buyers are conscious of Nvidia at this level. Including to that place additional doesn’t cut back or diversify that threat. Celestica gives an alternate approach to keep invested in AI whereas latching on to a unique a part of that very same worth chain.
Briefly, Celestica enhances these U.S. tech titans relatively than duplicates them.
For buyers trying to rebalance with out stepping away from AI, Celestica is the TSX inventory I’d add now.