Sterling Infrastructure, Inc. STRL is rapidly transforming from a traditional site-development contractor into a full-scale mission-critical infrastructure partner, and its cross-selling strategy could become a major catalyst for future AI-related contract wins.
The company’s recent acquisition of CEC, an electrical services provider focused on mission-critical projects, is already producing results ahead of schedule. Management noted during the first-quarter 2026 earnings call that Sterling is actively executing two hyperscale data center campuses where it is providing both site development and electrical services in an integrated capacity. Notably, these joint awards materialized six to eight months earlier than management originally anticipated.
Notably, the strategy appears well aligned with the explosive growth in AI-driven infrastructure spending. Hyperscalers increasingly prefer contractors that can streamline project execution, reduce construction timelines and handle multiple components of increasingly complex data center campuses. STRL believes the combination of civil site work, electrical capabilities and modular manufacturing solutions gives it a differentiated edge compared with its competitors. Combined backlog surged 131% year over year to $5.2 billion as of the first quarter of 2026, while STRL’s broader visible work pipeline approached $6.5 billion. More than 90% of E-Infrastructure backlog is now tied to mission-critical projects, including data centers and semiconductor facilities.
Importantly, management expects cross-selling benefits to improve margins as integrated projects drive greater efficiency and productivity. Sterling also continues expanding geographically into Texas, the Midwest and the Pacific Northwest as hyperscale customers pull the company into new AI infrastructure markets.
Thus, with AI data center demand accelerating and integrated service offerings gaining traction, Sterling’s cross-selling playbook may unlock even larger contract opportunities in the years ahead.
Are Sterling, EMCOR & Quanta Dominating Data Centers?
Sterling is rapidly strengthening its position in the AI infrastructure boom through integrated site-development and electrical offerings. However, this does not make it immune to close competition with market players like EMCOR Group, Inc. EME and Quanta Services $PWR, Inc. PWR.
EMCOR continues to benefit from rising data center and network infrastructure spending, supported by strong demand for mechanical and electrical construction services. The company has expanded its presence in mission-critical projects, though its growth pace remains more balanced across commercial and institutional markets.
Meanwhile, Quanta remains an industry heavyweight, leveraging surging AI-driven electricity demand, grid modernization and hyperscale data center expansion. Quanta’s massive backlog and utility relationships position it strongly for long-term AI infrastructure spending trends.
STRL Stock’s Price Performance & Valuation Trend
Shares of this Texas-based infrastructure services provider soared 137.8% year to date, significantly outperforming the Zacks Engineering - R and D Services industry, the broader Construction sector and the S&P 500 Index.
Image Source: Zacks Investment Research
STRL stock is currently trading at a premium compared with its industry peers, with a forward 12-month price-to-earnings (P/E) ratio of 37.24, as shown in the chart below.
Image Source: Zacks Investment Research
Earnings Estimate Revision for STRL
STRL’s earnings estimates for 2026 and 2027 have moved upward in the past 30 days to $17.77 and $22.43 per share, respectively. The estimated figures for 2026 and 2027 imply year-over-year growth of 63.3% and 26.2%, respectively.
Image Source: Zacks Investment Research
Sterling stock currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
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