CLS Stock Jumps 12% As Broadcom AI Call Sparks Switch Rally
Yahoo Finance ·
Dell and Hewlett Packard also raised their full-year revenue forecast this week, pointing to still-rising data-center hardware demand, a plus for Celestica.The Toronto electronics manufacturer had become one of the weaker AI-linked names after a $3.45 billion equity offering in early August.Celestica is already building high-speed switches that use Tomahawk 6 for two large cloud customers and has said it will start delivering the first OpenAI server racks later this year.Shares of Celestica Inc. (CLS) jumped about 12% on Thursday, snapping a three-month slide, after investors read Broadcom’s Wednesday-night earnings call as a signal that demand is still rising for the high-speed switches and AI server racks Celestica builds for cloud customers.The stock clocked its best day on Thursday since November 2025. Broadcom’s Comments That Lifted CLSBroadcom beat fiscal third-quarter estimates with $29.59 billion in sales and $3.32 in adjusted earnings per share. AI chip revenue reached $16.7 billion. Management said on Wednesday that custom accelerators and AI networking revenue should each triple year over year in the current quarter, lifting AI semiconductor sales to $21.7 billion.CEO Hock Tan said sales of the chips that connect AI servers grew more than 2.5 times from a year earlier. President Charlie Kawwas said Broadcom’s latest switch chip, Tomahawk 6, is now used by almost every major cloud company building AI clusters — including those that buy their AI processors from others. A faster, lower-latency version called Tomahawk Ultra also started shipping this quarter. The next chip, Tomahawk 7, which can move twice as much data, has finished design and is heading toward production.Tan also said OpenAI’s first custom AI chip, Jalapeño, shipped in the quarter. OpenAI plans to install about 1.3 gigawatts of those systems in 2027 and has a path to more than 5 gigawatts in 2028. Celestica is already building high-speed switches that use Tomahawk 6 for two large cloud customers and has said it will start delivering the first OpenAI server racks later this year. Confirmation that those chips and switches are shipping supports that backlog.DELL And HPE Add To The TapeThe Broadcom call landed on top of two server prints. Dell reported record AI server orders of $60.9 billion and a $95 billion backlog, then raised its annual revenue forecast to $192 billion. Hewlett Packard Enterprise posted record quarterly revenue of $12.2 billion and lifted its outlook on AI servers and networking. Together, the three reports pointed to still-rising demand for data-center hardware, a plus for Celestica.The Toronto electronics manufacturer had become one of the weaker AI-linked names after a $3.45 billion equity offering in early August. Shares are still down over three months.How Did CLS Retail Traders ReactOn Stocktwits, retail sentiment around CLS stock improved from ‘bearish’ to ‘bullish’ over the past 24 hours, while message volume remained ‘high.’CLS stock has gained 5% year-to-date. Read More: TSLA Stock Up 7% Ahead Of Cybercab Launch Event — Fund Manager Sees Selloff Ahead, Citing Past PatternsFor updates and corrections, email newsroom[at]stocktwits[dot]com.
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