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Can EMCOR's Data Center Expansion Fuel Long-Term Growth?
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Key Takeaways
EMCOR's data center work surged 112% YoY, hitting $3.6B of its $11.75B total backlog in Q1 2025.
Demand is fueled by hyperscale and enterprise clients adopting cloud and generative-AI technologies.
EME expects continued growth through 2026, supported by strong client visibility and record backlog.
EMCOR Group, Inc. (EME - Free Report) is gaining solid traction in the data center space, positioning itself to benefit from long-term demand in the digital infrastructure ecosystem. The company has significantly expanded its presence across U.S. data center markets, supported by both organic growth and strategic acquisitions. As of March 31, 2025, total remaining performance obligations were $11.75 billion, up 28.1% year over year. Of this, $3.6 billion was tied to the network and communications sector, which includes data center work, marking a 112% increase from the prior-year period and 28% sequentially.
This growth is backed by elevated demand from hyperscale and enterprise clients, driven by the rapid adoption of cloud services and generative Artificial Intelligence (AI) workloads. According to the company, approximately 85% of the network and communications work is directly tied to data center construction. EMCOR now operates in more than 16 electrical and multiple mechanical geographies, serving this segment, up from just five years ago. The company also noted increasing project complexity and a growing mechanical scope due to the rising power and cooling needs of next-generation data centers.
With its prefabrication and virtual design and construction capabilities, EMCOR is well equipped to handle large-scale, multi-phase data-center campuses. The company expects continued expansion in both new and existing markets, with strong client visibility extending into 2026. Backed by a record backlog and a positive 2025 outlook, EMCOR appears positioned to sustain growth as digital infrastructure continues to scale.
Other Industry Players Poised to Benefit From Data Center Growth
Comfort Systems USA (FIX - Free Report) and MasTec, Inc. (MTZ - Free Report) are among the key competitors positioned to capitalize on the rising demand for data-center infrastructure.
Comfort Systems is benefiting from strong demand for data center and semiconductor projects, driving record first-quarter 2025 results with earnings up more than 75% and revenues rising 19% year over year. Its backlog reached an all-time high of $6.9 billion, supported by robust bookings across mechanical and electrical work. While tariff pressures and hyperscaler spending shifts pose risks, record operating margins and heavy investment in modular capacity position Comfort Systems well to maintain momentum and capture growth in technology-driven markets.
MasTec is gaining strong traction from the rapid expansion of data-center development, which is driving demand for power infrastructure and fiber connectivity. The surge in artificial intelligence, cloud computing and high-performance data storage is fueling significant investments in new facilities, creating substantial growth opportunities. MasTec is well-positioned to benefit as companies prioritize the swift deployment of digital infrastructure to meet rising technological demands.
EME’s stock is currently trading at a premium compared with the industry peers, with a forward 12-month price-to-earnings ratio of 21.64X.
Image Source: Zacks Investment Research
EMCOR’s earnings estimates for 2025 and 2026 have remained unchanged over the past 30 days at $23.59 and $25.47 per share, respectively. These projections imply year-over-year growth of 9.6% for 2025 and 8% for 2026.
Image: Bigstock
Can EMCOR's Data Center Expansion Fuel Long-Term Growth?
Key Takeaways
EMCOR Group, Inc. (EME - Free Report) is gaining solid traction in the data center space, positioning itself to benefit from long-term demand in the digital infrastructure ecosystem. The company has significantly expanded its presence across U.S. data center markets, supported by both organic growth and strategic acquisitions. As of March 31, 2025, total remaining performance obligations were $11.75 billion, up 28.1% year over year. Of this, $3.6 billion was tied to the network and communications sector, which includes data center work, marking a 112% increase from the prior-year period and 28% sequentially.
This growth is backed by elevated demand from hyperscale and enterprise clients, driven by the rapid adoption of cloud services and generative Artificial Intelligence (AI) workloads. According to the company, approximately 85% of the network and communications work is directly tied to data center construction. EMCOR now operates in more than 16 electrical and multiple mechanical geographies, serving this segment, up from just five years ago. The company also noted increasing project complexity and a growing mechanical scope due to the rising power and cooling needs of next-generation data centers.
With its prefabrication and virtual design and construction capabilities, EMCOR is well equipped to handle large-scale, multi-phase data-center campuses. The company expects continued expansion in both new and existing markets, with strong client visibility extending into 2026. Backed by a record backlog and a positive 2025 outlook, EMCOR appears positioned to sustain growth as digital infrastructure continues to scale.
Other Industry Players Poised to Benefit From Data Center Growth
Comfort Systems USA (FIX - Free Report) and MasTec, Inc. (MTZ - Free Report) are among the key competitors positioned to capitalize on the rising demand for data-center infrastructure.
Comfort Systems is benefiting from strong demand for data center and semiconductor projects, driving record first-quarter 2025 results with earnings up more than 75% and revenues rising 19% year over year. Its backlog reached an all-time high of $6.9 billion, supported by robust bookings across mechanical and electrical work. While tariff pressures and hyperscaler spending shifts pose risks, record operating margins and heavy investment in modular capacity position Comfort Systems well to maintain momentum and capture growth in technology-driven markets.
MasTec is gaining strong traction from the rapid expansion of data-center development, which is driving demand for power infrastructure and fiber connectivity. The surge in artificial intelligence, cloud computing and high-performance data storage is fueling significant investments in new facilities, creating substantial growth opportunities. MasTec is well-positioned to benefit as companies prioritize the swift deployment of digital infrastructure to meet rising technological demands.
EME’s Price Performance, Valuation and Estimates
EMCOR stock has risen 43.6% in the past three months compared with the Zacks Building Products - Heavy Construction industry’s 39.5% rise.
Image Source: Zacks Investment Research
EME’s stock is currently trading at a premium compared with the industry peers, with a forward 12-month price-to-earnings ratio of 21.64X.
Image Source: Zacks Investment Research
EMCOR’s earnings estimates for 2025 and 2026 have remained unchanged over the past 30 days at $23.59 and $25.47 per share, respectively. These projections imply year-over-year growth of 9.6% for 2025 and 8% for 2026.
Image Source: Zacks Investment Research
EMCOR currently holds a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.