Celestica Stock Plunges Nearly 13% as AI Tech Sector Faces Widespread Investor Selloff Pressure

TLDRs;

• Celestica shares fell almost 13% amid broad AI sector selloff, triggering investor caution.
• Insider purchases and institutional stakes suggest continued confidence despite recent volatility.
• Analysts remain largely bullish with 2026 revenue and EPS projections indicating strong growth.
• Short-term swings reflect options activity, AI hype, and market rotation pressures on CLS stock.

Celestica Inc. (NYSE: CLS; TSX: CLS) faced a dramatic decline this week, with shares dropping nearly 13% to close at $306.50 in December . The pullback underscores the volatile nature of high-growth AI-related stocks, where market sentiment can shift rapidly and trigger significant repricing.

Early pre-market trading on December 15 showed a mild rebound to $312.10, but investors remain cautious amid broader technology sector weakness.

Celestica Inc., CLS

Sector Selloff Drives Sharp Decline

Celestica’s drop cannot be viewed in isolation. On December 12, the broader TSX technology sector experienced a pronounced downturn, pushing Celestica shares lower. Analysts attribute this move to a rotation out of technology stocks as concerns about frothy AI valuations intensified.

Companies with high exposure to AI and data center infrastructure, like Celestica, are particularly susceptible to abrupt market sentiment changes.

Reuters highlighted worries over a potential “AI-fueled bubble” and increasing borrowing costs as contributing factors. Even though Celestica itself reported solid performance, the stock was caught in a wave of sector-wide de-risking. High expectations for AI growth combined with valuation sensitivity make the stock prone to sharp swings during risk-off periods.

Insider and Institutional Moves Signal Confidence

Despite the selloff, investor confidence appears to remain intact. MarketBeat reported that B. Riley Wealth Advisors increased its stake by 11,319 shares in Q2, valued at approximately $1.77 million, bringing institutional ownership to roughly 67.38% of the company.

Insider activity also drew attention: director Laurette T. Koellner purchased 6,000 shares on October 30 at an average price of $341.67. While these actions alone did not prevent the decline, they signal that long-term investors maintain faith in the company’s trajectory.

Strong 2026 Outlook Supports Bullish Thesis

Celestica’s fundamentals continue to show strength, particularly with guidance for the upcoming year. The company expects Q4 2025 revenue between $3.325 billion and $3.575 billion, and full-year 2026 revenue projected at $16 billion with adjusted EPS of $8.20.

These figures position Celestica as a key player in AI-era data center infrastructure, from switching and storage platforms to full systems integration.Analysts largely maintain positive ratings.

TipRanks lists a “Strong Buy” consensus with an average 12-month target of $368.77, while MarketBeat reports a “Moderate Buy” consensus with an average target of $336.13. The divergence in targets reflects differences in coverage and weighting, but overall, the Street remains above the current price, supporting the long-term narrative.

Market Sentiment and Short-Term Swings

Short-term price action is influenced by options activity and trader positioning. Benzinga reported unusual options trades on December 10, with eight calls versus two puts. While not predictive, such activity illustrates the stock’s growing presence among institutional and fast-money traders.

Additionally, Celestica continues to release innovative products, including 1.6TbE data center switches for AI/ML clusters and the ultra-dense SD6300 storage platform, reinforcing its higher-value positioning in the data center stack.

Investors will be monitoring upcoming earnings updates, hyperscaler capital expenditure trends, and macroeconomic factors such as interest rates that may influence AI trade sentiment. Whether the current dip stabilizes or continues will depend on these intersecting variables.

Bottom Line

Celestica Inc. exemplifies the highs and lows of investing in AI infrastructure. Strong growth expectations and bullish analyst targets coexist with sudden, market-driven re-pricing.

As 2026 approaches, investor focus will center on whether Celestica can deliver on its ambitious projections while weathering broader sector volatility.

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