Too Much U.S. Tech? Here’s the TSX Stock I’d Add now

U.S. tech stocks have dominated the market for years, and Nvidia has become the poster child for that surge. Investors who loaded up on NVDA have been rewarded, but the trade has also become extremely crowded.

When one stock or sector drives such a huge share of returns, there’s a real risk of being dependent on a single theme. In this case, that theme is U.S. tech.

Fortunately, there are options for Canadian investors looking for that exposure to the AI buildout without including the same U.S. mega‑cap names. One such option for investors to consider right now is Celestica (TSX:CLS).

Why U.S. tech exposure is overloaded

The AI boom we’ve seen in recent years has pushed Nvidia to historic heights. The influence that one stock has on the broader market has grown just as quickly. The fact that NVDA stock accounts for such a disproportionate share of market gains should have seasoned investors questioning that concentration risk.

That risk is real. And the need to diversify is equally important. Fortunately, it is possible to diversify and remain within the broader tech stocks theme. Rather than adding more exposure to U.S. chip giants or software titans, the alternative is to identify companies that can benefit from that AI demand, without as much risk.

That’s where the appeal of Celestica comes into play.

Celestica: The AI hardware builder

Celestica doesn’t compete with U.S. tech giants, nor is it a chip designer. The company builds the hardware systems that are leveraged by AI. It manufactures the data-centre infrastructure, servers, and advanced electronics for cloud and enterprise customers.

In short, Celestica caters to the physical layer of AI that connects those hyped-up chips to functioning systems.

That’s an important distinction. As AI workload demand continues to grow, so too will the need for servers, networking equipment, and power-dense hardware. Celestica is uniquely positioned to build those systems. It’s a different angle of AI that has strong demand and benefits from the tailwinds of Nvidia’s surge.

That growth is evident. Over the trailing 12-month period, Celestica’s share price has surged by over 170%. That even outpaces Nvidia’s strong 57% increase over the same period.

That’s not to say the stock is immune to volatility. Celestica has dipped over the past month, falling 9%.

The fundamentals haven’t changed. Demand for AI hardware remains strong, and Celestica continues to win new business as customers scale up their infrastructure.

Celestica gives investors exposure to AI infrastructure without the valuation extremes of U.S. mega‑caps. It’s tied to that trend, but its business model is more grounded in manufacturing, backlog growth, and operational execution. That makes the overall risk different and more balanced than that of the high‑multiple chip designers driving the market.

Why Celestica is the tech stock to buy now

Celestica’s growth runway is tied directly to the expansion of AI data centres. As companies deploy more GPUs, they need more systems integration, more power management, and more advanced hardware.

These are the areas where Celestica has deep expertise. The company has been executing well, improving margins and expanding its backlog, which gives visibility into future revenue.

By way of example, let’s look at the recent quarterly update. In that update, Celestica reported revenue of $3.7 billion. That was a 44% year-over-year improvement. On an adjusted basis, which works out to $1.89 per share, that’s up from $1.11 per share last year.

That revenue growth is expected to continue throughout 2026 and into 2027. Celestica is also increasing its capital investments to $1 billion for this year, funded completely from operating cash flow.

For investors, the strong results and recent dip provide a clean entry point. With AI infrastructure demand accelerating, Celestica is positioned to keep benefiting over the longer term.

Final thoughts

Most tech-heavy investors are aware of Nvidia at this point. Adding to that position further doesn’t reduce or diversify that risk. Celestica offers an alternative way to stay invested in AI while latching on to a different part of that same value chain.

In short, Celestica complements those U.S. tech titans rather than duplicates them.

For investors looking to rebalance without stepping away from AI, Celestica is the TSX stock I’d add now.

The post Too Much U.S. Tech? Here’s the TSX Stock I’d Add now appeared first on The Motley Fool Canada.

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Fool contributor Demetris Afxentiou has no position in any of the stocks mentioned. The Motley Fool recommends Celestica. The Motley Fool has a disclosure policy.