Quanta Services projects 110% tech revenue growth by 2030 on AI data centers

Quanta Services Inc. expects technology-related revenue to surge more than 110% by 2030, driven by a wave of AI data center construction and advanced manufacturing projects that are straining US power supplies. The Houston-based infrastructure contractor made the projection on July 9, citing multi-year demand from hyperscale developers and industrial reshoring.

"Total investments in US AI data centers will reach nearly $462 billion by 2031, with the Southeast accounting for about 28% of that spending," according to a July analysis by industry research firm Arizton. The firm forecasts the US colocation market to grow at an average annual rate of nearly 12% through 2031 to $85 billion.

The Southeast is projected to add enough new power capacity to support thousands of megawatts of additional data center operations by 2031, reinforcing its position as one of the nation's fastest-growing regions. Northern Virginia remains the country's largest data center market, while Texas and Arizona account for most of the investment in the Southwest. Construction costs range from $9 million to $14 million per megawatt depending on location, Arizton said, reflecting limited land availability, elevated labor rates, and access to power. In the New York-New Jersey region, demand for data center space remains strong, with 94% of available space already occupied.

Quanta's outlook points to a broader infrastructure buildout that is changing the US power industry. The company's technology-related revenue includes work on electrical transmission, substations, and renewable interconnection for data center campuses. With the US colocation market on track to nearly double in size over the next five years, Quanta is positioned as a primary beneficiary of the physical-layer investment required to power AI workloads.

The surge in data center construction is already creating bottlenecks across the power equipment supply chain. US power companies are scrambling to secure transformers, switchgear, and other grid components as lead times stretch and prices rise, according to industry reports. Quanta's backlog of $1 billion and pipeline exceeding $7 billion — comparable to peers like CECO Environmental Corp., which secured a $135 million order in December for an emissions management system at a Texas natural gas plant supporting data center expansion — reflect the scale of demand.

Quanta shares have gained 33% year to date, outperforming the iShares US Power Infrastructure ETF's 12% rise. The company's forward guidance implies a multi-year revenue tailwind that extends beyond the current AI CapEx cycle, as data center operators sign long-term power purchase agreements that lock in demand for grid interconnection work through the end of the decade. JPMorgan recently initiated coverage of CECO Environmental with an overweight rating and a $130 price target, citing exposure to AI-driven data center power demand and electrification as drivers of durable, multi-year growth — a thesis that applies broadly to infrastructure contractors serving the data center buildout.

For Quanta, the challenge will be execution. The company must navigate extended lead times for electrical equipment, labor shortages in construction trades, and rising material costs that have pushed data center construction costs to $9 million to $14 million per megawatt. If Quanta can deliver on its backlog while maintaining margins, the 110% growth target may prove conservative — the Arizton data suggests total AI data center investment could reach $462 billion by 2031, a figure that implies years of sustained demand for the infrastructure contractors building the grid behind the AI boom.

This article is for informational purposes only and does not constitute investment advice.