2 Pick-and-Shovel Plays for Major Digital Infrastructure Buildout

Key Points

• Digital infrastructure builders and service providers play a critical role in enabling the expansion of the AI industry.
• Pick-and-shovel companies like Quanta Services and MYR Group have seen share prices surge this year, but top- and bottom-line growth shows no signs of slowing.
• Still, investors should keep an eye on margins and other factors when considering a digital infrastructure company investment.

Digital infrastructure is big business, as companies race to set up the operations necessary to power AI integration, connectivity solutions, and much more. Given the intense demand for data centers, hardware, and related products, investors might seek out pick-and-shovel plays in the industry—firms that provide vital components and services that others rely on, even if they are not the largest or flashiest names in the space.

Among a growing number of digital infrastructure companies, two stand out for their critical positioning and analyst support: Quanta Services Inc. NYSE: PWR and MYR Group Inc. NASDAQ: MYRG. The firms differ in many respects (in size, for one: Quanta has a market capitalization of $110 billion compared to just $7 billion for MYR), but both have the potential to secure a strong foothold in the booming data infrastructure business.

Quanta Services Expands Its Offerings to Serve Data Centers, With Impressive Results

Quanta Services is known as a provider of transmission and distribution systems, construction, grid modernization services, and other offerings for the electric power industry. While it has traditionally partnered with utilities, independent power companies, and oil and gas firms, in recent quarters, it has included data centers in its operations.

The shift toward data centers has contributed to some impressive earnings results. In the first quarter of the year, Quanta reported 26% year-over-year (YOY) revenue gains to $7.9 billion, about $873 million above analyst predictions. Adjusted earnings per share (EPS) of $2.68 was also ahead of expectations by 64 cents. Adjusted EBITDA of $686 million was notable, and the company raised its full-year guidance for both revenue and EPS, a sign of optimism about future prospects.

Quanta's backlog should help to continue to drive growth going forward. The firm reached a record backlog of $48.5 million in the first quarter of 2026, thanks to broad-based bookings by utilities, data centers, hyperscalers, and more. The firm's business is successfully diversifying to include these latter clients—and unlike some rivals, Quanta is not abandoning its core utilities services.

On top of these noteworthy performance highlights, Quanta is also investing heartily in its future by dedicating up to $700 million to double its transformer manufacturing capabilities. The firm plans to almost double its off-site fabrication capacity to nearly 7 million square feet. This is all in service of its goal to more than double its earnings by 2030. Analysts see nearly 18% in earnings growth in the coming year, a healthy start toward achieving that lofty goal.

Expectations of strong earnings growth are just one way that analysts are bullish on Quanta. Twenty out of 27 have rated PWR shares a Buy, even after shares have surged by more than two-thirds of their value year-to-date (YTD).

MYR Group Is Well-Positioned in the Data Center Landscape, But Margin and Share Price Concerns Linger

A much smaller firm than Quanta, MYR Group is also involved in specialty electrical services. This company has traditionally offered turnkey solutions like overhead and underground line construction, installation and maintenance of substations, and so on. Like Quanta, MYR is also increasingly involved in data center construction, providing critical electrical services.

MYR has also experienced solid growth in recent periods, with Q1 2026 bringing 20% YOY improvement to revenue (and a $68-million sales beat). Sales reached $1 billion for the quarter, a noteworthy landmark. EPS is also thriving, nearly doubling YOY to $2.99 for the first quarter and beating predictions by 90 cents. Both net income and EBITDA (of $47 million and $82 million, respectively) were quarterly records for the firm.

Like Quanta, MYR has a solid backlog of $2.8 billion, up 8% YOY for the first quarter. The company is doing well with cash generation, finishing Q1 with $163 million in cash and strong borrowing availability, operating cash flow, and free cash flow alike. While MYR has not yet made significant moves to deploy that capital, it has the flexibility to funnel it back into growth efforts, to make acquisitions, or to initiate a buyback plan.

Investors will likely want to see MYR continue to improve its margins going forward. Gross margin of 13.4% for Q1 was a marked improvement over 11.6% previously, but there is still ample room for growth there. Analysts are similarly optimistic about this firm: five out of eight call MYRG stock a Buy. However, investors may want to be mindful of the company's near-term share price potential. Now that the stock has risen more than 100% YTD, the analyst consensus price target is actually about 20% below current levels.