5 Infrastructure Stocks to Ride 2025's Building Boom Into 2026

Global infrastructure spending is expected to remain structurally strong into 2026, driven by IIJA-funded U.S. public works (about $350 billion for federal highway programs through FY2026), a grid-modernization “super-cycle,” data-center expansion and faster approvals in Europe (Germany looks for a 2025–26 civil-works recovery). That durable multi-year demand favors engineering, construction and specialty-services leaders—Jacobs is leveraging record backlog and program-management capabilities, while Dycom (record results, all-time backlog, strategic M&A) and Sterling (shift to higher-margin e‑infrastructure) show the clearest digital/data-center exposure; MasTec offers diversified power and communications tailwinds; EMCOR benefits from margin resilience and record remaining performance obligations; and Quanta sits at the center of large-scale transmission and electrification spending. Market confidence is reflected in strong YTD stock rallies (Dycom +101.6%, Sterling +89.4%, MasTec +61.9%, EMCOR ~+37.5%, Quanta ~+37.9%) and recent upward revisions to 2026 EPS forecasts, underscoring multi-year revenue visibility for investors focused on infrastructure-linked long-duration cash flows.

Analysis

Global infrastructure spending is projecting multi-year strength into 2026 driven by U.S. IIJA-funded public works (~$350 billion for federal highway programs through FY2026), a cited grid-modernization "super-cycle," and accelerating data-center capacity that expands demand beyond traditional roads and bridges. Europe is responding with faster permitting priorities and Germany's construction association forecasts sector turnover rising 0.6% this year and 2.5% in 2026, underscoring coordinated public policy support for project acceleration.

Company-level signals reinforce that macro view: Jacobs is leveraging record backlog and program-management capabilities, Dycom reported record quarterly results, an all-time backlog, a pending mission-critical electrical contractor acquisition and a YTD share gain of 101.6% alongside recent Zacks EPS upgrades to $10.71 (fiscal 2026) and $14.45 (fiscal 2027); Sterling (+89.4% YTD) and MasTec (+61.9% YTD) show margin tailwinds from e-infrastructure and power, while EMCOR and Quanta report record remaining performance obligations and visibility tied to data centers and grid work.

Implications for investors are clear: durable demand and rising EPS/revenue revisions create favorable structural exposure for engineering, construction and specialty-services leaders, but outcomes depend on backlog conversion, timing of public and BEAD-funded projects, execution on high-margin mix shifts, and permitting/funding schedules in Europe and the U.S.; elevated YTD stock moves also introduce valuation and concentration risks.

Key Decisions for Investors

• Increase exposure selectively to firms with record backlogs and explicit data-center or grid exposure (DY, STRL, PWR, EME, MTZ, J) while prioritizing those showing recurring-service revenue and confirmed contract pipelines
• Use near-term evidence—backlog conversion, Zacks EPS revisions, BEAD funding execution and European permitting timelines—as add or reduce signals rather than relying solely on YTD momentum
• Manage execution and concentration risk by scaling into positions on signed awards or margin improvement, and consider partial profit-taking or hedges in names with large YTD gains (notably DY +101.6% and STRL +89.4%)