Bull of the Day: MasTec, Inc. (MTZ)

MasTec, Inc. MTZ is a market-crushing, under-the-radar infrastructure construction stock benefiting directly from the artificial intelligence spending boom.MTZ is helping lead the charge in the once-in-a-lifetime expansion of the energy industry, which has only just begun, to support power-hungry AI, reshoring, and more.MasTec stock outclimbed Nvidia, Meta, and other big AI stocks in the past year, as part of a 1,800% charge since 2010 vs. the S&P 500’s 500%. MTZ broke out meaningfully above its July records last week, trading at fresh highs. Yet, the AI-driven infrastructure stock trades below its average Zacks price target and at a solid discount in terms of valuation.MasTec’s improving earnings revisions earn it a Zacks Rank #1 (Strong Buy), and its growth outlook is stellar. Plus, its Building Products-Heavy Construction industry is in the top 1% of roughly 250 Zacks industries, further bolstering its standing as a must-buy stock to play the AI-driven energy infrastructure megatrend that’s still in its infancy. Big tech, the U.S. government, and Wall Street are fully committed to winning the AI arms race and dominating the rest of the century and beyond, from an economic and technological standpoint. MasTec is playing a key role in helping reach this future since it requires a massive expansion of U.S. energy, grid, and communication infrastructure.  AI Infrastructure Megatrend: Buy MTZ Stock and Hold Forever  MasTec is an infrastructure engineering and construction standout that roughly doubled its revenue between 2020 and 2024, driven by massive spending throughout its portfolio. This growth came after MTZ more than doubled its sales between 2011 and 2019.The company specializes in engineering, construction, installation, maintenance, and upgrades across communications, energy, utility, and other infrastructure.MTZ is prepared to be a long-term winner in the broader AI-boosted infrastructure spending spree in the U.S. that will be measured in decades and cost trillions of dollars.Image Source: Zacks Investment ResearchBig tech companies are all in on AI, with hyperscalers such as Amazon set to spend a combined ~$400 billion on AI-focused capex in 2025 alone. Global data center infrastructure capex is projected to reach ~$7 trillion by 2030.Generative AI platforms such as ChatGPT use 10x the energy of an average Google search, with large data centers consuming as much electricity as a midsize city. This is why U.S. electricity demand is set to grow by ~25% by 2030 and ~75% by 2050 from 2023 levels. The U.S. government is aiming to quadruple nuclear energy capacity by 2050, while rolling out an all-of-the-above approach to energy expansion. Amazon, Meta, Microsoft, and Alphabet are using their collective trillion-dollar balance sheets to secure more power across nuclear, natural gas, solar, and beyond. Utilities must double transmission capacity by 2050 to support this growth.Image Source: Zacks Investment ResearchThe Florida-based firm operates four segments: Communications (wireless and wireline/fiber infrastructure); Power Delivery (utility transmission and distribution); Pipeline Infrastructure (natural gas pipeline and distribution services); and Clean Energy and Infrastructure (renewable energy and heavy civil/industrial projects).The power-hungry AI age, electrification, and the reshoring of critical manufacturing such as semiconductors are all happening at the same time. MasTec’s entire portfolio is growing directly alongside the converging infrastructure spending megatrend.Given the bullish operating environment, it makes sense that MasTec’s Building Products-Heavy Construction industry ranks in the top 1% of 245 Zacks industries, boosting its bull case since studies have shown that roughly half of a stock's price movement can be attributed to its industry group.On top of that, 19 of the 20 brokerage recommendations Zacks has for MasTec are “Strong Buys,” and it gained more attention from Wall Street brokers in the past three months.MTZ’s AI-Boosted Growth OutlookMTZ grew its Q2 revenue by 20% to a quarterly record of $3.5 billion as part of a beat-and-raise report. More importantly, its 18-month backlog climbed 23% YoY last quarter to $16.5 billion, driven by “significant” new awards in “Clean Energy and Infrastructure.”MasTec’s earnings outlook has climbed since its Q2 release on July 31, with its Most Accurate Estimate for 2026 6% above its already improved consensus. Its recent upward earnings revisions help earn its Zacks Rank #1 (Strong Buy) and extend a long-term trend of positive revisions. Plus, MTZ has beaten our earnings per share (EPS) estimates by an average of 25% over the past four quarters.Image Source: Zacks Investment ResearchThe company is projected to expand its adjusted EPS by 58% in 2025 and another 22% next year, after expanding its bottom line by 120% last year. MTZ’s bottom-line expansion is projected to be driven, in part, by 14% revenue growth in 2025 and 7% higher sales next year to reach $15 billion—vs. $6.3 billion in 2020.Image Source: Zacks Investment ResearchBuy the AI Infrastructure Stock for Value and Breakout PotentialMasTec stock has skyrocketed ~1,800% in the past 15 years to more than triple the S&P 500 and blow away its highly ranked industry’s 1,000%. The stock has surged 66% in the past 12 months to outclimb AI darling Nvidia’s 50%.MTZ stock hit all-time highs on Wednesday, yet it still trades 7% below its average Zacks price target. The recent charge helped the stock climb above its July 31 peaks, while remaining below its more overheated RSI levels from earlier this year.Image Source: Zacks Investment ResearchThe stock could face some selling pressure if Wall Street bulls finally decide to take some profits after the Fed officially cut rates. Any pullback to its 50-day moving average could mark an even better entry point for traders, while long-term investors might not want to play the market timing game.MTZ’s impressive earnings growth outlook is highlighted by the fact that it trades at a 45% discount to its highs at 28.2X forward 12-month earnings. Image Source: Zacks Investment ResearchWall Street, big tech, and the U.S. government know we won’t reach the abundant, AI-driven future that they are all betting on without massive energy industry expansion. MasTec is a stock investors should seriously consider buying to benefit from this investment megatrend.Beyond Nvidia: AI's Second Wave Is HereThe AI revolution has already minted millionaires. But the stocks everyone knows about aren't likely to keep delivering the biggest profits. Little-known AI firms tackling the world's biggest problems may be more lucrative in the coming months and years.See "2nd Wave" AI stocks now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report MasTec, Inc. (MTZ): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks