$STRL · Mark Roussin, CPA · 2026-11-05

The second company is experiencing exceptional growth as demand for artificial intelligence infrastructure continues to rise .

It is a stock of Sterling Infrastructure Company, and its trading symbol is STRL. I think Sterling represents one of the most interesting ways to invest in building AI infrastructure.

Sterling provides specialist infrastructure services, including site development and electrical works, for those large, mission-critical projects . The great thing about Sterling is how they adapt to the opportunity presented to them.

They have projects related to building solutions and transportation solutions, but as you can see on your screens, the influx and demand for data centers has pushed this business to new heights, and their latest earnings report was exceptional.

Third quarter revenues increased by nearly 127% year-on-year, reaching nearly 1.6 billion. Part of this growth came from acquisitions, but organic revenue growth was still around 70%.

This is unbelievable. As for adjusted earnings per share , they increased by approximately 118% to reach $7.58 per share.

But here's what really caught my attention. Sterling's total backlog of business has reached approximately $6.1 billion . This is an increase of nearly 80% compared to the previous year.

When management adds projects that are still in the design phase and other identified opportunities, the total rises to $8 billion.

Now, none of this represents signed contracts, and I want to make sure you understand this difference because investors should not treat every potential project as a guaranteed revenue stream.

But it gives an indication of the level of demand that Sterling is experiencing.

Over the past week, we have heard from companies such as Amazon, Alphabet, and Microsoft, to name a few. The message was remarkably consistent. They continue to spend huge sums on building artificial intelligence infrastructure, some more than others.

In several cases, they expect capital expenditures to increase again next year. This spending does not automatically convert dollar for dollar into revenue for Sterling, but it reinforces the broader demand environment that I was talking about and that Sterling supports.

The latest management findings indicate that the company is benefiting from this. Revenues from electronic infrastructure solutions have increased by more than 200% year-on-year.

The administration has raised its guidelines for the entire year. So, we are seeing strong demand translating into actual revenue and real profit growth.

Returning to InvestingPro, we see that Sterling shares have declined, especially after the recent elections, as investors fear a slowdown in the artificial intelligence sector.

Over the past twelve months, we see that stocks have now fallen by more than 25%, but this decline has already absorbed much of that slowdown and more.

Investment models still indicate a fair value of around $445 per share, and the stock's current market capitalization is around $10 billion.

Turning to earnings forecasts, we see that analysts still expect Sterling to achieve earnings per share of around $28 next year, which implies a forward price-to-earnings ratio of only 12.9 times.

Twelve times the profit for a company whose earnings are growing by 100% this year and 25% next year, even taking the slowdown into account. This is unbelievable.

Now, here are the risks. If major data center projects are delayed, construction costs rise, or the giant companies ultimately decide to cut spending, the stock could face significant pressure.

There is another detail that deserves attention. Sterling's signed backlog of work fell slightly compared to the previous quarter, although it remained significantly higher year-on-year.

This does not automatically indicate weak demand, especially given how quickly the company is executing its projects, but it is something to monitor because I don't want to blindly assume that the backlog of work will grow forever.

In short, I bought Sterling shares because the growth is real. The demand is clear, and I believe the investment cycle in artificial intelligence infrastructure still has plenty of room to go.

It's similar to the backlog of orders we were looking at with Sterling.

So, these are the three stocks I recently bought: UnitedHealth, Sterling, and Vertief. Sterling benefits from building huge data centers.

But Sterling and Vertief share one major risk. Both depend to varying degrees on continued investment in data center infrastructure. Therefore, although they operate in different sectors, they are not completely independent investments.