Buy This Incredible Artificial Intelligence (AI) Stock Before It Soars 144% (Hint: It Will Outpace Nvidia’s Growth)

The artificial intelligence (AI) infrastructure boom is here to stay. SemiAnalysis, which provides independent research on the semiconductor industry, predicts that the data center build-out will accelerate next year.

SemiAnalysis notes that global data center capacity net additions could surge to 51.2 gigawatts (GW) in 2027, more than double this year's 25 GW. The planned additions for next year point to an acceleration over 2026's estimated 60% capacity addition. This is great news for Nvidia, as its strong share of the AI chip market should help sustain its impressive growth next year.

However, there is another company that's winning big from the huge investments in AI data centers and is poised to grow faster than Nvidia. Celestica (NYSE:CLS), which designs, engineers, and builds hardware used in data centers and cloud computing infrastructure, released phenomenal results for the third quarter on Oct. 26.

Shares of the Canadian company surged 12% following its report. Let's see why that was the case.

Image source: Getty Images.

The AI infrastructure build-out has led to terrific acceleration in Celestica's growth

Celestica is a contract electronics manufacturer that provides services across multiple verticals. However, it is the company's connectivity and cloud solutions (CCS) business that's fueling its growth right now.

Celestica's Q3 revenue increased 83% year over year to $5.83 billion. What's more, the company's adjusted earnings more than doubled from the year-ago period to $3.30 per share. The CCS segment produced 84% of Celestica's top line last quarter, and its revenue increased by 102% from the year-ago period.

Celestica divides its CCS segment into networking & computing and storage. The networking sub-segment's revenue increased by 68% from last year to $3.26 billion. Meanwhile, compute and storage saw stronger growth of 242% to $1.61 billion. The company has built a solid customer base that includes Advanced Micro Devices, Broadcom, and Intel, and all these chip giants have been growing at a solid pace.

As these customers are tapping Celestica to build high-speed networking components such as switches, along with storage controllers and custom AI chips, it is easy to see why Celestica's growth has taken off. The company has raised its 2026 guidance, now expecting a 69% revenue increase to $21 billion. Adjusted earnings per share (EPS) are projected to jump by 91% to $11.55.

Celestica has constantly increased its guidance throughout the year. It was originally expecting $16 billion in 2026 revenue, along with adjusted EPS of $8.20. Clearly, the strong data center spending environment has supercharged its growth as the year has progressed. More importantly, Celestica's 2027 guidance of $40 billion in revenue implies a 90% jump from 2026. Additionally, it expects adjusted EPS to jump by 86% to $21.50.

However, don't be surprised to see Celestica raise its guidance in the future due to higher planned data center net capacity additions for 2027.

The valuation makes the stock a screaming buy

Trading at just 14 times forward earnings, Celestica stock is a steal right now. In fact, Celestica's forward earnings multiple is identical to that of industry bellwether Nvidia. But what's worth noting is that Celestica's 2027 forecast indicates that it is on track to clock faster growth than Nvidia.

The semiconductor giant expects 70% revenue growth next year, and we have just seen that Celestica has issued a stronger forecast that may improve. That's why I won't be surprised to see Celestica stock trade at a premium valuation in the future. In fact, Celestica's earnings could nearly triple in just two years, according to consensus estimates.

CLS EPS Estimates for Current Fiscal Year data by YCharts

If the stock trades at even 21 times earnings at the end of 2028, in line with the tech-laden Nasdaq-100 index's forward earnings multiple, its price could soar to $660 (based on 2028's projected EPS of $31.27). That implies potential upside of 144% in just over two years, indicating that Celestica's earnings-driven bull run is sustainable.

Finally, the valuation suggests that Celestica is a value stock that's capable of growing at a phenomenal pace, which is why buying it is a no-brainer right now.

Harsh Chauhan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Broadcom, Celestica, Intel, and Nvidia. The Motley Fool has a disclosure policy.