From Yahoo Finance · · 1m 30s
Quanta Services is riding the grid buildout
A picks-and-shovels play on AI power demand has doubled the S&P 500's return, but it just lost its lead in its own sector.
In brief
A picks-and-shovels play on AI power demand has doubled the S&P 500's return, but it just lost its lead in its own sector. Quanta is beating the index on every timeframe with a record $53.4 billion backlog behind it, but a 20% drawdown and a faster-rising rival show the trade is crowded and volatile. Originally…
The company behind the wires
Quanta Services builds and maintains energy and communications infrastructure across the US, Canada and Australia. Market cap sits at $96.1 billion.
AI needs power lines
Data centers, reshored factories, electrification and renewables all need grid capacity. Quanta sells the transmission, distribution and substation work that makes it happen.
Beating the index everywhere
PWR is up 48.6% year to date and 67.9% over 52 weeks, against 11.6% and 17.3% for the S&P 500. Over three months it gained 9.4% versus 3.4%.
But it has pulled back
Shares sit 20.5% below their $788.75 high from May 6. The stock holds above its 200-day average, though an August slip under the 50-day hints at consolidation.
“the recent dip does little to diminish its broader momentum”
The quarter that moved it
On July 30, PWR jumped 17.3% after revenue rose 41.1% to a record $9.56 billion and adjusted EPS climbed 71% to $4.24. Backlog hit a record $53.4 billion.
A rival is running harder
Comfort Systems USA is up 73.1% this year and 127.6% over 52 weeks, well ahead of Quanta. Still, 27 analysts rate PWR a Strong Buy with a $805.69 target, 28.5% above current levels.
The key point
Quanta is beating the index on every timeframe with a record $53.4 billion backlog behind it, but a 20% drawdown and a faster-rising rival show the trade is crowded and volatile.
