CLS Expands Networking Portfolio for Edge AI: Will it Drive Growth?

Celestica, Inc. CLS has been steadily expanding its portfolio of campus access and gateway switches to support the increased connectivity demand at the enterprise edge. Modern edge networks in smart campuses, industrial sites or dense IoT deployments in retail space or education centers require fast port speed to support growing AI workloads. The company recently introduced ES1500, a state-of-the-art enterprise access switch.

The switch offers up to 48 ports with 2.5 gigabit ethernet (GbE) per port speed. 90W power over ethernet for connected devices ensures greater scalability and flexibility. With a fanless, 8-port compact design, the switch can support an extended temperature range. Such versatility optimizes cost and makes it ideal for space-constrained deployment at an enterprise’s edge. 220 GB switching capacity and 2.5X faster speed compared with the previous ES1000 GbE model allow ES1500 to effectively match the unique requirements of new edge IoT and edge-AI applications.

As modern IT infrastructure becomes more complex with high-density IoT deployments, cloud application companies across industries are looking for ways to optimize their capital and operational expenditure. With high-speed, scalable ports and compact design, Celestica’s ES1500 switch is well equipped to meet these criteria.

Such innovations will strengthen the portfolio and boost the commercial prospects of Celestica’s Connectivity & Cloud Solutions segment. Management’s strong emphasis on innovation, product diversification and AI advancements is key growth driver.

How Are Competitors Faring?

Celestica faces stiff competition from Flex Ltd. FLEX and Jabil, Inc. JBL. 

Flex has evolved into an end-to-end solutions provider where it is engaged in design, procurement, manufacturing and supply services for a broad range of products. The company continues to anticipate strong growth in the cloud and data center power business in fiscal 2026. Its innovative suite of power products and services enhances customer satisfaction. All these factors are favorably positioning Flex for the AI-powered technology shift, prevalent in the industry, from grid to chip and from the cloud to the edge.

Jabil is witnessing solid momentum in AI data-center infrastructure, capital equipment and warehouse automation markets. Its focus on end-market and product diversification is a key catalyst. A large-scale portfolio of business sectors offers Jabil a high degree of resiliency during times of macroeconomic and geopolitical disruption.

Celestica's Price Performance, Valuation and Estimates

Celestica shares have gained 175.3% over the past year compared with the industry’s growth of 90.1%

From a valuation standpoint, Celestica trades at a forward price-to-earnings ratio of 26.87, up from the industry average.

The Zacks Consensus Estimate for Celestica’s earnings for 2025 has increased 5.87% in the past 60 days.

Celestica currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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