Sterling vs. Comfort Systems: Which AI Infrastructure Stock Wins?

Sterling Infrastructure, Inc. STRL and Comfort Systems USA, Inc. FIX are emerging as major beneficiaries of the artificial intelligence infrastructure buildout. Sterling provides site development and mission-critical electrical services for data centers, semiconductor facilities and other large projects, while Comfort Systems provides mechanical, electrical, HVAC and modular solutions for technology and other industrial customers.

Their overlap has become increasingly relevant as hyperscalers and other technology customers invest heavily in data center capacity. Sterling is gaining from the need for large-scale site preparation and electrical infrastructure, while Comfort Systems is benefiting from demand for electrical, cooling, mechanical and prefabricated modular systems. 

Both companies also enter the second half of 2026 with record or sharply higher backlogs and strong earnings momentum. Let's dive deep and closely compare the fundamentals of the two stocks to determine which one is a better investment now.

The Case for Sterling Stock

Sterling's growth story is increasingly centered on E-Infrastructure Solutions. Second-quarter 2026 revenues jumped 90% year over year to $1.17 billion, including roughly 50% organic growth, while adjusted earnings per share (EPS) surged 116% to $5.80. E-Infrastructure revenues soared 192%, driven by strong organic performance and contributions from CEC and Stone Ridge. Mission-critical projects, including data centers, manufacturing and semiconductor facilities, accounted for 92% of E-Infrastructure backlog.

Visibility is particularly compelling. Sterling ended June with $4.3 billion of signed backlog and $5.6 billion of combined backlog, up 116% and 150%, respectively. High-probability future-phase opportunities exceeded $1.4 billion, taking total visibility into potential work above $7 billion. Data center projects are becoming larger, lasting longer and spreading into additional markets, while expansions of existing projects are creating opportunities not yet captured in backlog. CEC also broadens Sterling's ability to combine site development with electrical work.

Management raised its 2026 outlook, with revenues now projected at $4-$4.15 billion and adjusted EPS at $19.70-$20.30. At the midpoint, adjusted EPS is expected to grow 84%. Sterling also has considerable financial flexibility. It finished the quarter with $464 million of cash versus $284 million of debt, leaving it in a net cash position, while first-half operating cash flow reached $328 million.

Still, Sterling has some weak spots. Building Solutions continues to face housing-affordability pressures, while Transportation revenues are expected to decline as resources shift toward higher-margin E-Infrastructure projects. Strong project burn and uneven award timing could also cause backlog volatility despite healthy underlying demand.

The Case for Comfort Systems Stock

Comfort Systems offers even broader exposure to the physical infrastructure needed to support AI computing. Second-quarter revenues increased 50% year over year to $3.27 billion, while EPS jumped 92% to $12.53. Backlog reached a record $14.06 billion, up from $12.45 billion sequentially and $8.12 billion a year earlier. Same-store backlog climbed to $13.70 billion.

Technology has become the company's dominant growth engine. It represented roughly 58% of first-half revenues, up sharply from 40% a year earlier. Comfort Systems is also expanding its Modular operations and customer base, including frontier labs and colocation providers. Modular represented 17% of year-to-date revenues, and dedicated capacity is expected to rise from more than 3.5 million square feet currently to more than 4 million by year-end and approximately 5 million by late summer 2027.

Importantly, the expansion is supported largely by existing demand. Management said much of the new modular capacity is intended for existing customers and orders, suggesting further customer wins could require additional capacity. Hunt Electric adds another growth lever, strengthening Comfort Systems' electrical capabilities and contributing an expected $250 million of annualized revenues.

Comfort Systems also has an exceptionally strong financial position. Second-quarter free cash flow approached $1 billion, and despite acquisitions and elevated capital investment, the company had more than $1.8 billion of net cash. Management expects capital expenditures of approximately 5% of revenues as it expands production capacity.

The main concern is concentration. Technology accounted for nearly three-fifths of revenues, increasing dependence on continued data center investment. Rapid expansion also requires significant spending on facilities and people, while labor availability, project execution and customer concentration remain risks. Nevertheless, record backlog and strong pipelines support management's optimism for the rest of 2026 and into 2027.

FIX Leads the Stock-Market Race

Both stocks have substantially outperformed the broader market in 2026. Sterling shares have climbed 68.7% year to date, while Comfort Systems has surged 77.4%. By comparison, the broader Zacks Construction sector has gained 7%, while the S&P 500 has risen 11.8%.

STRL vs FIX Price Performance (YTD)

Image Source: Zacks Investment Research

Thus, Comfort Systems holds the edge on share-price momentum. Both have also outpaced major U.S.-listed infrastructure peers such as Quanta Services, Inc. PWR and EMCOR Group, Inc. EME, underscoring investors' enthusiasm for companies positioned around data centers, electrification and AI infrastructure.

Sterling Offers the More Attractive Valuation

Valuation shifts the advantage toward Sterling. STRL currently trades at 21.77X forward 12-month earnings compared with 30.9X for FIX and 19.59X for the Zacks Construction sector.

Sterling therefore commands only a modest premium to the sector despite its faster expected 2026 earnings and revenue growth. Comfort Systems' premium reflects its record backlog, superior cash generation and powerful technology exposure, but also leaves less room for execution disappointments.

STRL vs FIX Valuation (P/E F12M)

Image Source: Zacks Investment Research

Rising Estimates Keep Both Earnings Stories Strong

Analyst revisions are encouraging for both companies. Over the past 30 days, the Zacks Consensus Estimate for Sterling's 2026 EPS has increased to $20.07 (as shown below), implying 84.5% year-over-year growth, while the revenue estimate indicates 65.2% growth. For 2027, EPS is projected to rise another 28.3% on revenue growth of 19.5%.

STRL EPS Estimate Revision Trend

Image Source: Zacks Investment Research

Comfort Systems' consensus estimate for EPS has also increased, reaching $45.86 for 2026 and $57.81 for 2027 (as shown below). The 2026 estimate implies 58.8% growth, alongside expected revenue growth of 38.3%. For 2027, earnings and revenues are projected to increase 26.1% and 20%, respectively.

FIX EPS Estimate Revision Trend

Image Source: Zacks Investment Research

Sterling consequently has the edge in expected 2026 growth and slightly stronger projected 2027 EPS expansion, although both companies' upward estimate revisions indicate improving analyst confidence.

Which AI Infrastructure Stock Wins?

Sterling offers an impressive combination of faster near-term growth, rapidly expanding mission-critical backlog, strong data center exposure and a considerably lower valuation. Its net cash position and rising E-Infrastructure margins further strengthen the long-term case. However, housing weakness, the planned contraction in Transportation and the potential lumpiness of large project awards introduce some uncertainty.

Comfort Systems looks stronger overall. Its much larger record backlog, dominant technology exposure, expanding modular platform, exceptional free cash flow and substantial net cash position provide a powerful combination of growth visibility and financial flexibility. Its valuation is clearly richer, but strong execution and rising earnings estimates help support that premium.

Comfort Systems, with a Zacks Rank #1 (Strong Buy), appears to offer better upside potential right now. Sterling, carrying a Zacks Rank #3 (Hold), arguably wins on valuation and near-term growth expectations, but Comfort Systems' stronger stock momentum, deeper backlog, cash-generation capacity and broader participation across the mechanical, electrical and modular infrastructure required for AI data centers give FIX the edge for investors seeking exposure to the AI infrastructure boom. You can see the complete list of today’s Zacks #1 Rank stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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