Quanta Services PWR is one of the best pure-play stocks to buy to benefit from the artificial intelligence-driven energy boom, which, alongside electrification and reshoring, is expected to boost U.S. electricity demand 50% or more by 2050.
PWR builds and maintains the largest and most important power and utility infrastructure projects in the U.S. The AI-boosted energy infrastructure stock soared ~2,000% in the past 10 years, blowing away its industry’s 200% and the S&P 500’s ~290%.
Yet, Quanta stock has fallen ~25% and is finding support near its 50-week MA heading into its Q3 earnings release that’s due out before the opening bell on Thursday, October 29. Meanwhile, its average Zacks price target implies 38% upside.
Now might be a chance for investors to buy the beaten-down AI energy and infrastructure stock and hold it for long-term upside.
PWR is One of the Best Stocks to Buy Now and Hold
Quanta is positioned almost perfectly to benefit from the AI-driven energy and utility sector spending boom that’s just heating up. PWR physically builds and maintains transmission lines, substations, distribution networks, generation interconnects, and other critical energy infrastructure.
The U.S. is in the midst of a once-in-a-lifetime spending spree to expand and restore the entire energy ecosystem, from attempting to quadruple nuclear capacity and adding more solar and battery energy storage to hardening and building out the grid. The U.S. electricity grid and energy sectors were already desperate for investment long before the AI boom pushed them to the brink.
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The next decade will require more new energy generation than any period in U.S. history as big tech spends trillions of dollars on AI data centers that guzzle as much power as mid-sized cities. U.S. electricity demand is projected to grow by 50% or more by 2050—some reports call for 100% expansion.
U.S. utilities have lifted planned spending to ~$240 billion in 2026 and $1.4 trillion total through 2030. The broader U.S. transmission system will have to double by 2050 to keep up with electrification and soaring demand.
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Quanta already doubled its revenue and its GAAP (and adjusted) earnings per share between 2021 and 2025. The firm ended the second quarter with a record backlog of $53.4 billion. Looking ahead, its CEO Duke Austin expects PWR will “compound profitable growth as our customers accelerate investment in the electric grid, power generation and mission-critical infrastructure that underpin the economy.”
The AI-boosted energy infrastructure stock is projected to grow its sales by 38% in 2026 and 15% in 2027 to reach $45.23 billion, easily doubling Quanta’s 2023 total and adding more than $20 billion vs. 2024.
Meanwhile, Quanta is projected to grow its adjusted earnings per share by 55% this year and 17% next year to soar to $19.47 a share in FY27 vs. $10.75 last year.
Its earnings revisions have climbed significantly since its Q2 release, with its 2027 estimate up 17%, and its most accurate EPS estimate came in 6% above consensus. Plus, PWR topped our quarterly estimates by an average of 17% in the past four quarters.
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The chart above shows its long-term earnings outlook is impressive. Quanta’s management confirmed early this year that it’s on a “clear path to more than doubling” its adjusted EPS by 2030 vs. its 2025 levels as it attempts to capture more of what it sees as a total addressable market of $2.4 trillion through 2030
PWR skyrocketed 2,800% in the past 15 years, blowing away its industry’s 233% and the S&P 500’s ~560%. This run includes a 260% charge in the last three years. Yet, investors can buy the stock down roughly 25% from its peaks as it attempts to find technical support at its long-term 50-week moving average.
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On the valuation front, Quanta is trading at a ~47% discount to its highs at 32.9X forward 12-month earnings. PWR is churning out solid free cash flow growth. On top of that, its strong balance sheet helped it announce a new $1 billion repurchase program in late May.
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This article originally published on Zacks Investment Research (zacks.com).
Source: finance.yahoo.com — article syndicated from the publisher’s feed; all rights remain with the original publisher.
