20 Industrial Stocks Already Riding the AI Wave

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4. Celestica Inc. (NYSE:CLS)

Number of Hedge Fund Holders: 38 

YTD Return as of August 1: 85%

Approximate Percentage Revenue from AI: 29%

Celestica Inc. (NYSE:CLS) offers a range of product manufacturing and related supply chain services. The firm has two primary business interests in the connectivity and cloud solutions (CGS) and advanced technology solutions (ATS) markets. The CGS segment comprises a healthier portion of the overall revenue than the ATS division. This mix was 55-45 in the second quarter. Within the CGS, the firm is playing the AI space through networking products like 400G and 800G switches, and growth in storage. It is also in the middle of technology transitions in sole-sourced programs that will help the firm expand business with the chip market.

In the second quarter earnings call, Rob Mionis, the CEO of Celestica Inc. (NYSE:CLS), noted that the top-line growth and margin expansion for the firm continued to be supported by large-scale investments in data center infrastructure from hyperscale customers. As a result, the firm saw a 51% year-to-year increase in CGS revenues in the second quarter and achieved a segment margin of 7.2%, which was 120 basis points higher compared to the prior-year period.

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