We recently compiled a list of the 10 Stocks Hurting From DeepSeek AI News That Could Turn Into Multibaggers. In this article, we are going to take a look at where Celestica Inc. (NYSE:CLS) stands against the other stocks on our list.
US semiconductor stocks are getting hammered after the Chinese launched an AI model that has many questioning United States dominance in the AI space. China is currently facing restrictions on importing state-of-the-art semiconductor equipment needed for AI training. The launch of DeepSeek AI despite these restrictions is an eye-opener for Western tech companies, and the investor sentiment is reflecting it.
As market participants scamper to gather more information on China’s progress, we decided to look at stocks that are not only taking a hit from this news but also provide an attractive buy-the-dip opportunity. Against the backdrop of Project Stargate, a US government initiative to pump private sector investments into AI infrastructure, these companies also offer a potential multi-bagger opportunity.
Usually, it is the low market cap companies that become multibaggers. However, the failure rate when betting on these companies is quite high. We therefore chose companies with a market cap between $10 and $25 billion. In this way, our list contains businesses that are already established and will thrive on the boost provided by Project Stargate while successfully managing any headwinds. We believe the downside to these stocks is minimal because of the already sound fundamentals of these companies.
A close-up of a circuit board with components depicting the intricate electronic componentry products the company produces.
Celestica Inc. (NYSE:CLS)
Celestica Inc. (NYSE:CLS) is a provider of connectivity and cloud solutions to customers across North America, Asia, and Europe. Like many other companies, it offers hardware, software, and services solutions to generate revenue. The company’s stock has nearly quadrupled in a year but there’s renewed optimism now that AI is in focus again. After today’s developments, it is available at a 12% discount.
Celestica Inc.’s (NYSE:CLS) growth is unlikely to slow down before 2027. The aggressive investments in data centers by Big Tech companies and now through Trump’s new Project Stargate program can not only sustain the company’s impressive 20% growth rate but could even accelerate it.
The only major risk associated with the stock is that 25% of its FY23 revenue came from just one customer while the top 10 customers generate 64% of the company’s revenue. This heavy dependence on a few customers could backfire, though the management is proactive and may well have already worked out a diversification plan. We will find out when the next earnings report comes out.
Overall CLS ranks 9th on our list of the stocks that are hurting from DeepSeek AI news that could turn into multibaggers. While we acknowledge the potential of CLS as a leading AI investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is as promising as CLS but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap
Disclosure: None. This article was originally published at Insider Monkey.
