Three AI Suppliers Just Beat Earnings Expectations but Wall Street Is Worried About Who Pays the Bill

Key takeaways

• Three AI suppliers report stronger-than-expected quarterly earnings
• Celestica cuts cash flow guidance despite soaring demand
• Wall Street questions financing behind AI infrastructure expansion

Three companies supplying the artificial intelligence boom delivered strong earnings on October 26. Celestica, Cadence Design Systems and Rambus all exceeded expectations, demonstrating that demand for AI infrastructure remains substantial.

Yet one detail complicates the celebration. Celestica expects revenue to nearly double next year, but it has reduced its cash flow forecast because supporting that growth requires additional investment.

Three AI Suppliers Report Strong Growth

Celestica delivered the most dramatic results.

The Canadian electronics manufacturer reported quarterly revenue of $5.83 billion, up 83% from a year earlier, while adjusted earnings per share more than doubled to $3.30.

Its October 26 earnings release projected $40 billion in revenue for 2027, approximately 90% above this year's $21 billion forecast.

Cadence, which develops software used to design advanced semiconductors, reported $1.63 billion in quarterly revenue, up 22%.

The company's official results also revealed a record $8.2 billion backlog and stronger demand for AI-assisted chip design.

Rambus completed the picture with record quarterly revenue of $218.3 million, up 22%, and adjusted earnings of $0.84 per share, exceeding analysts' estimates.

The results reinforce a trend Coinpaper previously identified when examining AI suppliers: equipment and technology providers can generate revenue before their customers earn adequate returns from the infrastructure.

Celestica's Cash Flow Reveals the Cost of Growth

Despite stronger earnings, Celestica reduced its 2026 free cash flow forecast from $600 million to $460 million.

Management attributed the $140 million reduction primarily to working capital investments needed to support anticipated growth in 2027.

In practical terms, expanding production requires spending money on components, inventory and manufacturing capacity before customers complete their payments.

Celestica also expects $1.5 billion–$2 billion in capital expenditures next year, underscoring the scale of its expansion.

This is not necessarily evidence of financial distress. Strong demand can temporarily absorb cash when suppliers need to expand rapidly.

But the same tension appears elsewhere in the industry.

Coinpaper previously reported how Applied Digital generated extraordinary revenue growth while recording substantial losses and carrying billions in debt.

Similarly, Amazon's infrastructure spending has pressured free cash flow despite accelerating cloud demand.

Who Ultimately Pays for the AI Boom?

Goldman Sachs strategist Rich Privorotsky identified access to capital, financing costs and potential computing oversupply as concerns for AI infrastructure investors, according to October 27 reporting by MarketWatch.

Those risks arise because building computing capacity requires enormous upfront investment, while customer revenue arrives over time.

Coinpaper recently examined the $466 billion AI debt surge, showing how banks, bondholders and private-credit funds increasingly finance infrastructure expansion.

Specialist cloud operators such as CoreWeave face additional pressure because borrowing costs can rise even when contracted demand remains strong.

That distinction is central to the CoreWeave financing debate.

It also explains why Apollo's research finding limited measurable AI productivity gains outside major technology companies matters.