Top Canadian stock soars 341% year-to-date – big growth ahead

The Canadian Equity Market Shows Resilience Amid Challenges

The Canadian equity market has demonstrated remarkable resilience over the past year, with steady gains despite ongoing geopolitical tensions and persistent trade uncertainties. A key indicator of this performance is the S&P/TSX Composite Index, which has climbed approximately 35%. This growth has been largely supported by strength in the basic materials sector and momentum in artificial intelligence (AI) stocks, which have driven significant investment in AI infrastructure.

Several Canadian stocks have experienced substantial appreciation over the past year, with Celestica (TSX:CLS) standing out as one of the top performers. Over the past year, Celestica stock has surged approximately 341%, and there are indications that this growth could continue, fueled by AI-led tailwinds.

Understanding Celestica’s Rally and Financial Performance

Celestica is a leading provider of data centre infrastructure and advanced technology solutions, well-positioned to capitalize on the rapid expansion of AI and cloud computing. As enterprises and hyperscale cloud providers invest heavily in AI infrastructure, demand for its products has surged.

The company's growth is primarily driven by its Connectivity & Cloud Solutions (CCS) segment, which serves communications and enterprise customers in fast-growing markets, including servers and storage. This segment offers high-performance networking switches, data centre interconnects, edge computing platforms, servers, and storage systems.

Strong demand for these products and solutions is driving Celestica’s financial performance, with the company reporting solid growth. In the first quarter (Q1) of 2026, revenue rose 53% year over year to $4.1 billion, driven by the CCS segment. Profitability also improved, with adjusted gross margin expanding by 30 basis points and operating margin rising 90 basis points. Celestica’s earnings per share (EPS) climbed 80% to $2.16.

The Advanced Technology Solutions (ATS) segment generated $806 million in revenue, remaining flat year-over-year. Growth in HealthTech helped offset the impact of portfolio reshaping in the Aerospace and Defense (A&D) business and weaker capital equipment demand. ATS contributed 20% of total revenue.

Meanwhile, CCS revenue surged 76% to $3.2 billion, accounting for 80% of total revenue. Communications revenue grew 69%, supported by strong adoption of 800G networking switches among hyperscale customers. Enterprise revenue jumped 101%, driven by the rollout of next-generation AI and machine learning (AI/ML) infrastructure.

Within CCS, the Hardware Platform Solutions (HPS) business delivered $1.7 billion in revenue, up 63%, supported by multiple hyperscaler deployments of advanced networking solutions.

Celestica’s Stock Has More Growth Ahead

Celestica continues to execute well and appears positioned to deliver strong growth led by AI-driven demand. The company expects second-quarter revenue of $4.15 billion to $4.45 billion, implying roughly 49% growth at the midpoint. Adjusted EPS is projected to rise 61% year-over-year, while operating margin is forecasted to expand by 60 basis points.

Notably, Celestica’s growth will be driven by its CCS segment. Within this segment, communications revenue is forecast to rise around 50%, supported by expanding deployments of high-speed 800G and 400G networking switches. Enterprise demand is even stronger, with expected growth of about 130%, driven by scaling AI/ML compute programs with hyperscale customers and increased volumes in storage.

In the ATS segment, revenue is expected to grow at a mid-single-digit pace. This will be supported by new program ramps in HealthTech and Industrial markets, as well as a recovery in demand for capital equipment.

Looking ahead, Celestica has raised its full-year 2026 outlook to $19 billion, up from $17 billion, reflecting approximately 53% growth. Adjusted EPS guidance has also been increased to $10.15, representing 68% growth. Moreover, margins are expected to improve. Celestica anticipates stronger revenue growth in 2027, driven by continued program expansions and rising demand.

Overall, the outlook points to a robust demand environment, which could drive strong financial performance and support further upside in Celestica’s stock.

Investing in Celestica: Considerations and Opportunities

Before investing $1,000 in Celestica, it is important to consider various factors. While the company has shown impressive growth, investors should evaluate their own financial goals and risk tolerance.

The Motley Fool Canada team has identified what they believe are the top 10 TSX stocks for 2026, and Celestica was not among them. However, other stocks like MercadoLibre have shown significant returns over time. For example, if an investor had invested $1,000 in MercadoLibre at the time of the recommendation, they would have seen over $18,000 in returns as of April 20th, 2026.

Stock Advisor Canada has a total average return of 94%, outperforming the S&P/TSX Composite Index. Investors interested in exploring potential opportunities can access the top 10 stocks when they join the mailing list.

For those looking to explore more options, additional reading includes articles on Canadian companies at the heart of the AI infrastructure buildout, long-term hold stocks, and growth stocks worth adding to a TFSA. The Tech Stock I’d Most Want to Buy If I Were Investing Today is another resource to consider.

Fool contributor Sneha Nahata has no position in any of the stocks mentioned. The Motley Fool recommends Celestica, and the Motley Fool has a disclosure policy.