Celestica Channels Capital to Supply Surging Big Tech AI Demand

Dow Jones10-27 21:43

0942 ET - Celestica is riding a massive surge in Big Tech AI spending, but scaling up requires significant capital. On an investor call, CFO Todd Ankenmann says that sales in the company's AI server and data storage division spiked 242%, handily topping internal expectations of roughly 190%. This was "driven by ramping volumes in hyperscaler AI compute and complemented by stronger-than-expected demand in storage programs." Tech giants have been deploying AI compute hardware, pushing up demand for data storage, and Celestica has been building up early volume ramps for next-generation 1.6T networking switches. To support this momentum into 2027, Celestica plans to channel cash into a $1.1 billion quarterly inventory buildup, trimming its near-term free cash flow outlook to fund production scaling.

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