Bull of the Day: Sterling Infrastructure, Inc. (STRL)

Sterling Infrastructure, Inc.’s STRL revenue and earnings are soaring as it helps physically build the AI data center boom and other pillars of the U.S. economy and Wall Street.

The AI data infrastructure company grew its GAAP earnings by ~525% between 2020 and 2025 and doubled its sales. STRL is projected to follow that up by doubling its revenue and its earnings again between 2025 and 2027 as the AI data center boom ramps up.

Despite mounting AI bubble fears, the AI hyperscalers such as Amazon and Meta are projected to spend ~$700 billion or more in AI-related capex in 2026 and ramp up again in 2027, after spending ~$400 billion in 2025.

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Globally, companies are projected to spend ~$7 trillion on AI-focused capex by 2030, according to McKinsey. Tons of this AI-centric spending is ending up in the pockets of Sterling and other companies that are helping build the foundations of the 21st century economy.

Sterling’s FY26 and FY27 earnings estimates have doubled over the last 12 months, and its recent upward earnings revisions land the stock a Zacks Rank #1 (Strong Buy).

It's risky buying stocks ahead of earnings, and Sterling's Q2 results are due out after the closing bell on Monday, August 3. That said, STRL stock already tanked 50% from its June records to Wednesday’s closing price.

Sterling surged on Thursday as Wall Street dove back into all things AI after the wave of selling quickly recalibrated STRL to more reasonable levels. It found some support at its long-term 50-week moving average after hitting some of its most oversold RSI levels in the past 10 years.

The AI data center infrastructure standout is trading nearly in line with its Zacks sector and the S&P 500 (at 22.7X forward earnings) even though Sterling has soared ~9,300% in the past 10 years. 

Best Stocks to Buy in August and Hold: AI Infrastructure Stock STRL

Sterling Infrastructure operates essential large-scale site development and services and mission-critical electrical services for AI data centers, semiconductor fabrication, manufacturing, e-commerce distribution centers, power generation, and more.

These five areas were some of the growth engines of the U.S. economy and Wall Street in recent years. They are also poised to remain the driving forces of the economy in the back half of the decade and beyond.

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STRL, which traces its roots back to the 1950s, started transitioning to the higher-margin, growth-heavy firm it is today roughly a decade ago.

Sterling Infrastructure builds and improves the physical backbone of vital segments of the economy. STRL handles heavy site work such as development, site and storm drainage, grading, paving, environmental remediation, erosion control, water and sewer line installation, and much more.

Its Electrical & Mechanical business is focused on installing and maintaining electrical systems, HVAC, plumbing, and more, including technology infrastructure such as cabling, audio-visual, and beyond. STRL also provides on-demand service and repair solutions and “7x24x365” emergency services.

STRL operates across three core segments, E-Infrastructure, Transportation, and Building Solutions. The firm completed its acquisition of leading specialty electrical and mechanical contractor CEC Facilities Group in September 2025 to “significantly expand” its E-Infrastructure capabilities.

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Sterling’s Transportation Solutions unit is focused on highways, bridges, airports, rail, and more. The Building Solutions segment is centered around concrete foundations for homes, parking structures, and commercial buildings.

The E-Infrastructure segment is by far its largest revenue contributor (59% in 2025, 72% in Q1 2026) and driver. E-Infrastructure revenue jumped up 59% YoY in 2025 and 72% in the first quarter of 2026, and its signed backlog increased 123% last quarter.

STRL said that “mission-critical projects, including data centers, manufacturing, and semiconductor facilities, represented over 90% of our E-Infrastructure backlog at quarter end.”

The AI Infrastructure Stock's Bullish Growth Outlook

The AI hyperscalers alone, including Microsoft MSFT and Meta, are projected to spend roughly $700 billion or more in AI-related capex in 2026 and ramp up again in 2027. Globally, companies are projected to spend $7 trillion on AI data center-focused capex by 2030, according to McKinsey.

The U.S. government, Wall Street, and big tech are racing to add more power to the grid to support the AI-boosted economy after decades of underinvestment. Tech titans such as Taiwan Semiconductor and Micron are also rushing to build chip manufacturing plants in the U.S., spurred by a huge push from the U.S. government.

AI growth, the reshoring of critical manufacturing, electrification, and more are set to boost U.S. electricity demand ~100% by 2050.

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This backdrop helped Sterling double its revenue between 2020 ($1.23 billion) and 2025 ($2.49 billion), including 18% YoY growth in 2025. More importantly, STRL expanded its GAAP earnings per share by 525% between 2020 and 2025, soaring from $1.50 a share to $9.38 per share.

Sterling closed Q1 FY26 with a $3.8 billion backlog, up 78% YoY. Its E-Infrastructure signed backlog soared 123%, or 74% excluding CEC, which it bought in September 2025.

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Looking ahead, Sterling is projected to grow its revenue by 59% in 2026 and another 29% in 2027 to reach $5.12 billion, more than doubling its 2025 total of $2.49 billion in the process.

STRL is expected to expand its adjusted EPS by 75% in 2026 and another 33% next year to soar from $10.88 a share in 2025 to $25.26 per share next year. 

More Reasons to Buy AI Infrastructure Stock STRL 

STRL stock has soared ~2,500% in the past five years to blow away its industry’s 115%, the S&P 500’s 70%, the construction sector’s 45%, and all the Mag 7 stocks from Nvidia to MSFT. This is part of a much larger surge over the past 10 years (+9,300%) and 25 years.

Sterling has surged 390% in the past two years and 85% YTD. Despite this run, investors can buy the AI data center infrastructure stock down roughly 43% from its peaks.

The stock has already undergone a healthy, much needed recalibration after it grew far too overheated amid the AI melt-up off the late March lows.

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The stock found buyers on Thursday at its long-term 50-week moving average, its 200-day, and its pre-May gap-up highs. Investors who buy STRL stock now could experience a roughly 75% gain if it were to return to its early June peaks of around $1,005 a share.

Its massive 45% pullback, mixed with its strong earnings growth outlook, has it trading at a 65% discount to its recent highs at 22.7X forward 12-month earnings. Sterling is also trading at only a slight premium compared to its sector’s 19.4X and the S&P 500’s 19.8X despite its massive outperformance.

The company also sports a robust balance sheet, highlighted by its booming shareholders' equity. And all nine of the brokerage recommendations that Zacks has are “Strong Buys.”

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This article originally published on Zacks Investment Research (zacks.com).

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