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Can AI-Driven Fiber Demand Revive MasTec's Communications Business?
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Key Takeaways
MTZ sees AI data center interconnectivity driving multiyear fiber demand worth tens of billions.
MTZ's Communications revenues rose 18% YoY to $802M in Q1 2026.
MTZ expects about $875M in Q2 Communications revenues and low double-digit margins.
MasTec, Inc.’s (MTZ - Free Report) Communications segment appears poised for a stronger growth cycle as artificial intelligence (AI) reshapes network infrastructure requirements. While traditional telecom spending has been uneven in recent years, the rapid buildout of AI data centers is creating a new source of fiber demand that extends beyond consumer broadband. Management believes the need to interconnect hyperscale data centers with high-capacity, low-latency fiber networks could create a multiyear investment opportunity measured in the tens of billions of dollars, providing a meaningful tailwind for the Communications business.
MasTec expects improving telecom fundamentals to support long-term growth, driven by rising data consumption from cloud computing, streaming, gaming and connected devices. Management noted that U.S. data usage is projected to nearly double by 2030, while AI is emerging as a major growth catalyst by increasing demand for high-bandwidth, low-latency fiber networks connecting hyperscale data centers. The company also expects the Broadband Equity, Access and Deployment (BEAD) program to boost rural broadband and middle-mile fiber construction, with public funding and private AI investments expanding growth opportunities beyond traditional wireless deployment cycles.
The improving demand environment is already beginning to translate into operating results. During the first quarter of 2026, the Communications segment’s revenues increased 18% year over year to $802 million. Although margins were temporarily affected by costs associated with exiting certain DIRECTV fulfillment markets, backlog reached another record level, rising 12% from the prior year. Management also pointed to strong, broad-based demand for wireline services and increasing customer interest in multiyear turnkey infrastructure projects. Looking ahead, MasTec expects Communications revenues of approximately $875 million in the second quarter while projecting low double-digit adjusted EBITDA margins.
While traditional telecom capital spending remains cyclical, MasTec believes AI-driven fiber deployment represents a structural growth opportunity rather than a short-term recovery. Combined with BEAD-funded broadband expansion and steadily increasing network traffic, the company sees multiple long-duration demand drivers supporting the Communications business. As AI data center interconnectivity accelerates and customers continue awarding larger turnkey fiber projects, the segment appears positioned to play a larger role in MasTec's broader infrastructure growth strategy.
How MasTec Compares in the AI-Driven Fiber Infrastructure Race
As AI accelerates investment in digital infrastructure, MasTec is competing with companies such as Sterling Infrastructure, Inc. (STRL - Free Report) and Quanta Services, Inc. (PWR - Free Report) , each benefiting from different parts of the AI buildout. While Sterling Infrastructure is gaining from data center site development and Quanta Services from grid expansion, MasTec is differentiated by its exposure to the communications infrastructure that connects AI campuses through long-haul and metro fiber networks.
Sterling Infrastructure is benefiting from the AI investment cycle primarily through mission-critical site development rather than communications infrastructure. Its E-Infrastructure business is seeing exceptional demand from hyperscale data centers and semiconductor facilities, with first-quarter 2026 E-Infrastructure revenues rising 174% year over year. The company also secured the first phase of a multibillion-dollar semiconductor fabrication campus and reported more than $5 billion of mission-critical backlog and future-phase opportunities.
Quanta Services is approaching the AI buildout from the power infrastructure side. The company is benefiting from accelerating investments in electric transmission, substations, generation and integrated infrastructure required to serve hyperscale data centers and rising electricity demand. Management highlighted growing technology and load-center opportunities, continued investments in transformer manufacturing and off-site fabrication capacity, and a record backlog supported by utility and AI-related projects.
MTZ Stock’s Price Performance & Valuation Trend
Shares of this Florida-based infrastructure construction company have surged 97.4% in the past six months, outperforming the Zacks Building Products - Heavy Construction industry, the broader Zacks Construction sector and the S&P 500 Index.
Image Source: Zacks Investment Research
MTZ stock is currently trading at a premium compared with its industry peers, with a forward 12-month price-to-earnings (P/E) ratio of 42.68, as shown in the chart below.
Image Source: Zacks Investment Research
EPS Trend Favors MTZ
For 2026 and 2027, MTZ’s earnings estimates have trended upward in the past 60 days. The revised estimated figures for 2026 and 2027 imply 35.9% and 35.3% year-over-year growth, respectively.
View the Zacks #1 Rank List
Image: Bigstock
Can AI-Driven Fiber Demand Revive MasTec's Communications Business?
Key Takeaways
MasTec, Inc.’s (MTZ - Free Report) Communications segment appears poised for a stronger growth cycle as artificial intelligence (AI) reshapes network infrastructure requirements. While traditional telecom spending has been uneven in recent years, the rapid buildout of AI data centers is creating a new source of fiber demand that extends beyond consumer broadband. Management believes the need to interconnect hyperscale data centers with high-capacity, low-latency fiber networks could create a multiyear investment opportunity measured in the tens of billions of dollars, providing a meaningful tailwind for the Communications business.
MasTec expects improving telecom fundamentals to support long-term growth, driven by rising data consumption from cloud computing, streaming, gaming and connected devices. Management noted that U.S. data usage is projected to nearly double by 2030, while AI is emerging as a major growth catalyst by increasing demand for high-bandwidth, low-latency fiber networks connecting hyperscale data centers. The company also expects the Broadband Equity, Access and Deployment (BEAD) program to boost rural broadband and middle-mile fiber construction, with public funding and private AI investments expanding growth opportunities beyond traditional wireless deployment cycles.
The improving demand environment is already beginning to translate into operating results. During the first quarter of 2026, the Communications segment’s revenues increased 18% year over year to $802 million. Although margins were temporarily affected by costs associated with exiting certain DIRECTV fulfillment markets, backlog reached another record level, rising 12% from the prior year. Management also pointed to strong, broad-based demand for wireline services and increasing customer interest in multiyear turnkey infrastructure projects. Looking ahead, MasTec expects Communications revenues of approximately $875 million in the second quarter while projecting low double-digit adjusted EBITDA margins.
While traditional telecom capital spending remains cyclical, MasTec believes AI-driven fiber deployment represents a structural growth opportunity rather than a short-term recovery. Combined with BEAD-funded broadband expansion and steadily increasing network traffic, the company sees multiple long-duration demand drivers supporting the Communications business. As AI data center interconnectivity accelerates and customers continue awarding larger turnkey fiber projects, the segment appears positioned to play a larger role in MasTec's broader infrastructure growth strategy.
How MasTec Compares in the AI-Driven Fiber Infrastructure Race
As AI accelerates investment in digital infrastructure, MasTec is competing with companies such as Sterling Infrastructure, Inc. (STRL - Free Report) and Quanta Services, Inc. (PWR - Free Report) , each benefiting from different parts of the AI buildout. While Sterling Infrastructure is gaining from data center site development and Quanta Services from grid expansion, MasTec is differentiated by its exposure to the communications infrastructure that connects AI campuses through long-haul and metro fiber networks.
Sterling Infrastructure is benefiting from the AI investment cycle primarily through mission-critical site development rather than communications infrastructure. Its E-Infrastructure business is seeing exceptional demand from hyperscale data centers and semiconductor facilities, with first-quarter 2026 E-Infrastructure revenues rising 174% year over year. The company also secured the first phase of a multibillion-dollar semiconductor fabrication campus and reported more than $5 billion of mission-critical backlog and future-phase opportunities.
Quanta Services is approaching the AI buildout from the power infrastructure side. The company is benefiting from accelerating investments in electric transmission, substations, generation and integrated infrastructure required to serve hyperscale data centers and rising electricity demand. Management highlighted growing technology and load-center opportunities, continued investments in transformer manufacturing and off-site fabrication capacity, and a record backlog supported by utility and AI-related projects.
MTZ Stock’s Price Performance & Valuation Trend
Shares of this Florida-based infrastructure construction company have surged 97.4% in the past six months, outperforming the Zacks Building Products - Heavy Construction industry, the broader Zacks Construction sector and the S&P 500 Index.
Image Source: Zacks Investment Research
MTZ stock is currently trading at a premium compared with its industry peers, with a forward 12-month price-to-earnings (P/E) ratio of 42.68, as shown in the chart below.
Image Source: Zacks Investment Research
EPS Trend Favors MTZ
For 2026 and 2027, MTZ’s earnings estimates have trended upward in the past 60 days. The revised estimated figures for 2026 and 2027 imply 35.9% and 35.3% year-over-year growth, respectively.
Image Source: Zacks Investment Research
MasTec stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.