While You Were Watching Dell
Published May 9th, 2026

At first glance, Friday looked like a simple story. Trump mentions Dell, stock gaps 13%, everyone scrambles. Clean narrative. Easy to retweet.

The part that gets glossed over is that Dell’s AI server backlog entering fiscal 2027 sat at $43 billion — undelivered. The company is guiding toward $50 billion in AI server revenue this year. None of that gets built in-house. None of it. The switches, the chassis, the custom compute platforms — that work gets done somewhere else, by someone most retail investors have never typed into a search bar.

That company is Celestica Inc. (NYSE: CLS).

I want to be careful here because the easy version of this pitch is boring: “supplier benefits from customer’s surge.” That’s not really what’s happening. Celestica isn’t a passive vendor riding Dell’s coattails. It’s an active design partner on some of the most technically demanding AI infrastructure platforms being built right now. AMD brought them in to co-develop a rack-scale AI compute platform called Helios. Broadcom’s CEO called them out by name as his preferred provider for the company’s most complex data center work. Those aren’t purchase orders. Those are seats at the engineering table.

And then there’s the switching business — which honestly deserves its own conversation.

Celestica holds roughly 41% market share in 200G+ advanced Ethernet switches. This is the gear that connects GPUs to each other inside an AI cluster. You can stack Nvidia chips floor-to-ceiling, but if the switching layer can’t move data fast enough between them, your cluster underperforms. Celestica just started shipping its DS6000-series 1.6 terabit switches to initial customers. That’s the next generation. They’re already there.

Q1 2026: $4.05 billion in revenue. Up 53% from the same quarter last year. Full-year 2025 came in at $12.39 billion — up 28% — with earnings nearly doubling. Management is now guiding 2026 to $17.0 billion and $8.75 in adjusted EPS. A few quarters ago Wall Street was modeling $14.1 billion for the year. They’ve beaten that, raised guidance, beaten again. The demand language from management isn’t cautious. It isn’t measured. The word they keep using is “strengthen.”

Sixteen analysts. Strong Buy consensus. Barclays at $441. Citi at $415. TD at $430 — specifically flagging recent weakness as an entry worth considering. Stock closed Friday around $377.

The America First angle isn’t spin. Celestica is putting a billion dollars into capex this year, a real portion of it expanding North American manufacturing. Onshoring AI infrastructure production isn’t just good optics right now — it’s the kind of capital allocation decision that keeps large domestic customers happy and gives the company a specific political durability that pure offshore assemblers don’t have. That matters when procurement decisions are being made in a policy environment like this one.

Now — the risks, because they’re not small.

Revenue is concentrated. A handful of hyperscalers are driving the bulk of this growth, and if any one of them pulls back, delays a program, or decides to vertically integrate what Celestica currently handles, the quarterly numbers could turn sharply negative. At 46x earnings, the market is pricing in continued execution. There is no valuation cushion for a stumble. The same $1.0 billion capex investment that makes the onshoring story compelling also compresses free cash flow to roughly $500 million this year — lean, given the pace of expansion. Scaling from $9.6 billion in 2024 to a projected $17 billion in 2026 requires precise execution across supply chains, customer ramps, and program timelines simultaneously. One meaningful slip surfaces in margins first, and margins at this valuation get watched closely.

This is where it gets interesting though. If the agentic AI shift is real — and the early signals suggest it is — the compute intensity per user workflow doesn’t just inch higher. It could scale by orders of magnitude. Agents stringing together hundreds of processing steps instead of one means more servers, more switches, more storage, more of the infrastructure Celestica is contracted to build. The demand curve they’re riding might not flatten for a while.

Dell got the headline Friday. Made sense. Presidential endorsements are hard to compete with for attention.

But the company quietly contracted into Dell’s $43 billion backlog, holding 41% of the AI switching market, expanding domestic capacity, and beating Wall Street estimates on repeat — that one was trading around $377 while everyone else was refreshing Dell’s chart. Whether that gap closes is the question I’d be thinking about this weekend.

This editorial is for informational purposes only and does not constitute investment advice. All data sourced from publicly available filings, analyst reports, and market data as of May 9, 2026. Investing involves risk. Do your own due diligence.