The surge of artificial intelligence (AI) and the resulting boom in new data centers are benefiting several pick-and-shovel stock plays, especially electrical infrastructure companies that both help get data centers up and running and keep them running.
Emcor Group (NYSE: EME), Schneider Electric (OTC: SBGSY), and Quanta Services (NYSE: PWR) may not be well known outside of their sector, but all three are seeing dependable revenue growth, thanks to the data center build-out. 1
Emcor: Double-digit growth, big backlog of orders Emcor, based in Norwalk, Connecticut, focuses on mechanical and electrical construction and facilities services in the United States and the United Kingdom. Data centers require massive cooling systems and complex electrical layouts to handle high-density computing. Emcor’s recent guidance hike was largely driven by a record $15.6 billion backlog, up 32.9% year over year, much of which is tied to these high-margin, technically demanding projects.
In the first quarter, Emcor reported record revenue, record earnings per share (EPS), and a record backlog. The company said it had quarterly revenue of $4.63 billion, up 19.7% year over year; EPS of $6.84, up 30% over the same period last year; and a backlog of $15.62 billion, up 32.9% year over year. The numbers were good enough that Emcor raised its yearly revenue guidance to $18.5 billion to $19.25 billion, up from prior guidance of $17.75 billion to $18.5 billion.