With Europe-wide inflation concerns pushing expectations for more ECB rate hikes, funding costs for large tech projects are in sharper focus. That makes the AI infrastructure story especially interesting today. Investors are paying closer attention to companies that already turn AI demand into cash flow, not just headlines. This article highlights three AI infrastructure stocks from our screener that align with that theme and may merit closer examination.

The three stocks highlighted below are just a small sample from this theme, and the full screen surfaced 52 more AI infrastructure companies with equally compelling narratives that are not covered here. To go deeper into the data and identify your own highest conviction opportunities, head straight into the AI Infrastructure Stocks screener.

Celestica (TSX:CLS)

Celestica is a Toronto based supply chain and electronics manufacturing company that builds hardware and platforms for original equipment makers and large cloud and service providers. Its strongest link to the AI infrastructure theme is the Connectivity & Cloud Solutions segment, which delivers hyperscale servers and rack-scale platforms, including the Helios AI rack developed with AMD, for data center and AI workloads. That segment generated about US$12.3b in revenue compared with roughly US$3.3b from Advanced Technology Solutions, and the company’s market cap is around CA$49.0b.

Celestica provides exposure to the physical build out of AI, from high speed networking to full rack AI systems for hyperscalers and OpenAI, backed by a large Connectivity & Cloud Solutions business. Profitability metrics such as a 45% return on equity and rising net margins indicate that AI related demand is translating into cash generation. A handful of very large cloud customers account for a significant share of revenue, so any pause in their AI spending or delays in 800G and 1.6T product ramps could affect results quickly. Investors considering this stock may want to weigh that customer and execution risk against its mix of AI infrastructure exposure, scale and recent earnings performance.

Celestica’s AI racks and high return on equity hint at a story that is still unfolding for investors who focus on cash generation rather than headlines. For more detail, see the analysis report for Celestica

Lumentum Holdings (LITE)

Lumentum Holdings is a San Jose based photonics manufacturer that supplies the optical transceivers, wavelength management systems and circuit switches that link AI and cloud data centers at high bandwidth and low latency. The business reports as a single Integrated Enterprise segment, which generated about US$3.0b in revenue from customers spread across the United States, Asia and EMEA. With a market cap of roughly US$84.2b, Lumentum offers investors exposure to the physical plumbing of AI networks through a sizable, hardware focused operation.

Lumentum Holdings is worth a closer look if you want pure hardware exposure to the AI build out rather than another software stock. Its optical modules and lasers are tied directly to rising demand for GPU heavy data centers, supported by large cloud customers and partnerships that have attracted analyst optimism around future revenue and earnings. At the same time, the company carries meaningful debt, a history of volatile results and a premium valuation that leaves less room for disappointment. The key question for investors is whether AI driven orders and higher margin optics can turn this cyclical photonics specialist into a more consistent cash generator in the years ahead.

Lumentum’s AI pipeline and premium pricing story feels only half told. The real question is whether the current volatility is masking something bigger in the 3 key rewards and 3 important warning signs.

Vertiv Holdings Co (VRT)

Vertiv Holdings Co builds the physical backbone that keeps AI data centers powered and cooled, with high density thermal management systems and integrated power infrastructure that directly address the heat and energy demands of AI servers. Alongside this AI linked offering, Vertiv remains diversified across broader data center, telecoms, and industrial customers, selling AC and DC power gear, racks, and lifecycle services across the Americas, Asia Pacific, and EMEA. The Americas segment generated about US$7.5b in revenue, Asia Pacific about US$2.7b and Europe, Middle East & Africa about US$2.4b, and Vertiv’s market cap is roughly US$101.6b.

Vertiv may be of interest if you want exposure to the “picks and shovels” behind AI, rather than one more software story. The company supplies the liquid cooling, high voltage power systems, and lifecycle services that AI data centers rely on, supported by a rising backlog, improving margins, and strong return on equity. That strength comes with trade offs. The stock trades on a premium valuation and depends heavily on a small group of hyperscale customers, so any slowdown in AI data center spending or competitive pressure in liquid cooling could affect expectations quickly.

Vertiv’s accelerating AI data center story is only partly visible in the current revenue mix and premium valuation. The real intrigue lies in the analyst forecasts for Vertiv Holdings Co and what that could mean if hyperscaler demand suddenly shifts.

Curious About What You Might Be Missing Next

Fresh opportunities can move from quiet to flying under the radar quickly. Use this window before the crowd catches on and the best entry points drop away. Act now.

• Spot income workhorses early and review the 4 dividend fortresses that could help keep cash flow coming in while the yields and momentum still look attractive.
• Ride potential AI momentum shifts by scanning the 74 profitable AI stocks that aren't just burning cash that already generate real earnings instead of relying on hope and aggressive future promises.
• Hunt for rare value before others notice and check the 13 high quality undervalued stocks that blend solid fundamentals with room for a possible rerating while it still matters.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.