Quanta Services: Countercyclical compounder riding a multi decade infrastructure buildout

Leading utility infrastructure services provider in the midst of an electrical grid modernization and an electrification boom

Welcome to the 14th investment case and 13th resilience, 7th reshoring/sovereignty and 5th AI & data center idea on Crack the Market (and the most comprehensive Quanta Services investment case you will find online)! Electrification, grid hardening and increased electricity demand growth (AI data centers) will require significant capital investments, and Quanta as the NA leader in utility infrastructure services is in the early stages of a multi-decade infrastructure build.

Twice a week, I will release deep dives into stocks and sectors that fit into the three themes that I see winning in this age of tariffs and deglobalization: resilience, sovereignty & reshoring, China. I will then deep dive into the opportunities in the AI data center value chain.

Take advantage of this once in a generation opportunity to build long term wealth by investing in great stocks that will deliver returns for your portfolio for years to come.

You can already read my first 13 deep dives, all of which I see as winners in this new world of tariffs and deglobalization:

• ASML (reshoring & China idea): The most innovative company in the world will 2.5x its EPS by 2030.

• LKQ (resilience idea): The most defensive business in the auto industry is a tariff winner and could become a compounder.

• Atlas Copco (resilience, reshoring & China idea): The best industrials business in the world is on sale, extremely resilient and will benefit from US reshoring.

• Badger Meter (resilience idea): The perfect business in the perfect end market, water meters are the definition of resilience.

• Knorr Bremse (resilience idea): Who knew making brakes was this lucrative? Rerating with self help story and upside from German infra plan.

• Flex (reshoring idea): The electronics manufacturing giant building Nvidia’s servers and enabling reshoring is becoming a better business.

• Itron (resilience & reshoring idea): Riding the grid investment super cycle and enabling smart grids.

• Roper (resilience idea): A resilient cashflow compounder in the software space with inflecting growth.

• RELX (resilience idea): The company to own forever – one of the very best businesses on Earth.

• CPKC (resilience & reshoring idea): The rail connecting Canada/US/Mexico and benefiting from reshoring.

• Novo Nordisk (resilience idea): The most exciting pharma company in the world is misunderstood and its growth engine is ready to roar back to life.

• Kurita (resilience, reshoring & China idea): Water services expert with improving margins and benefiting from reshoring of semiconductor production.

• Halma (resilience idea): High quality compounder in safety, health and environmental technologies.

After reading this article, you will understand why this company is so special thanks to a unique breadth of service, talent pool and execution, what it does, why it is so defensive thanks to its exposure to utility capex spend, why the megatrends in front of us will lead to decades of growth for the company and why it remains one of the best businesses to own for the next decade and an attractive way to gain exposure to the AI/datacenter and electric load growth megatrends.

In this article I go through:

1. Quanta’s business, how it dominates the utility infrastructure services business and how its M&A strategy has made it a success.

2. How an aging electrical grid, coupled with the electrification of society and rapid load growth from AI data centers are leading to a multi decade growth trajectory.

3. How Quanta’s culture, scale, track record and availability of skilled labor make it the premier outsourcing partner for utility projects.

4. How its strong relationship with its risk averse customers and growing grid investments plan will provide a resilient and predictable growth engine for Quanta’s core business.

Quanta Services Investment Case