Quanta Services is Wednesday's IBD Stock Of The Day, with the S&P 500 AI data center-adjacent play flashing a buy signal in an actionable base after a bullish analyst upgrade.
The heavy-construction company builds electric plants and provides other services for the power grid. The need for artificial intelligence computations is fueling a boom in data centers, which require massive amounts of electricity. In addition, many companies are shifting manufacturing into the U.S., resulting in more factory construction.
In late July, Quanta Services reported its second-quarter sales climbed 21% to $6.77 billion and earnings rose 31% to $2.48 a share. Both numbers exceeded FactSet's analyst consensus estimates. Quanta had already completed three acquisitions in the first half of 2025 and announced at the end of July it closed a deal for Austin, Texas-based construction firm Dynamic Systems.
With the acquisition completed on July 25, Houston-based Quanta raised its full-year sales guidance to $27.4 billion-$27.9 billion and moved up its profit forecast to $10.28 to $10.88 a share.
"Demand for our services remains resilient, fueled by our customers' multiyear programs to build the power grid, generation and energy infrastructure necessary to support load growth from technology adoption and manufacturing reshoring," Quanta CEO Duke Austin told analysts at the time.
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For the full year, analysts polled by FactSet expect Quanta Services earnings to climb about 18% to $10.57 a share. Sales are estimated to rise around 17% to $27.66 billion. Analyst estimates have been trending higher.
Of the 34 analysts who cover Quanta, the average rating is overweight with a 429.80 price target, FactSet shows.
Investors can also keep tabs on the Leaderboard, the IBD 50 list of top growth stocks and IBD SwingTrader along with the IBD Sector Leaders list.
S&P 500: Quanta Services Stock Performance
PWR stock advanced 3.5% to 403.01 during Wednesday's stock market, clearing a short-term high and trendline within a flat base.
The S&P 500 stock has a traditional buy point of 424.94, according to MarketSurge charts. Quanta Services reclaimed its 50-day moving average on Sept. 18 and is still trading near that level.
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The S&P 500 component bottomed at 227.08 in April but has gained nearly 80% since then.
Late Tuesday, Jefferies analysts upgraded Quanta Services to buy from hold, increasing the stock price target to 469 from 398. The firm noted that the company's total addressable market is expanding across data centers, renewables, transmission and pipelines.
The analysts added that Quanta's "top-tier" customers and craft-labor leverage could drive high-teens earnings growth into the next decade and that the stock's current valuation, which has pulled back from the summer's highs, provides an attractive entry point.
On Sept. 4, Mizuho initiated coverage of Quanta Services with a neutral rating and a 360 price target, with analysts writing that the company is positioned to benefit from a grid and electrification "supercycle," with secular growth in data centers, grid modernization and clean energy.
The 24 stocks in the IBD-tracked Building-Heavy Construction industry group have collectively advanced around 50% in the 2025 stock market. That's good for the 8th best industry group out of the 197 tracked by IBD.
Quanta Services stock has gained around 28% in this year's stock market, placing it in the top 100 best performing S&P 500 stocks.
The S&P 500 stock has a robust 96 Composite Rating out of a best-possible 99. Quanta Services stock also has a 79 Relative Strength Rating and a near-perfect 98 EPS Rating.
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