Construction firms bullish on data centers

Construction contractors are still talking about data centers as one of the few parts of commercial building with visible momentum. In recent earnings commentary collected by Construction Dive, companies including Jacobs, AECOM and Tutor Perini pointed to AI-related work, hyperscaler demand and adjacent power and civil projects as active sources of growth. That demand is showing up even as bond markets have turned less supportive for long-duration capital spending, with U.S. and Japanese yields moving higher this week. The split matters because data centers are among the most capital-intensive pieces of the AI buildout, and contractors are describing a market that is still expanding on the ground. ### Why are builders still sounding confident? Construction Dive reported on May 18 that major publicly traded builders “remain bullish on data center construction” during the latest round of earnings calls, with one civil contractor preparing to pursue the sector for the first time. The publication tied that confidence to the broader artificial-intelligence buildout and to continued federal infrastructure work. (constructiondive.com) Jacobs gave one of the clearest numerical signals. Bob Pragada, the company’s chief executive, said on May 6 that Jacobs’ data center business grew by more than 100% year over year in the quarter, driven largely by hyperscaler spending on construction and advisory services. Pragada said data centers account for about 3% to 4% of Jacobs’ business, while the broader AI infrastructure ecosystem represents roughly 10% of its portfolio. (constructiondive.com) ### Which companies are adding exposure? Tutor Perini said on May 8 that it is exploring how to expand its data center exposure from specialty work into a broader presence. Gary Smalley, the company’s president and chief executive, told investors the contractor was “exploring ways to expand” while remaining cautious about moving too far from its core civil markets. (constructiondive.com) Construction Dive’s broader roundup said a civil firm was entering the sector for the first time, which is notable because data center work has historically been concentrated among larger contractors with specialized balance sheets, labor pools and relationships. Associated Builders and Contractors said on May 14 that backlog growth remains concentrated among firms with more than $100 million in annual revenue, especially those with data center contracts. (constructiondive.com) ### What does the backlog data say about who is winning? Associated Builders and Contractors said April backlog rose to 8.8 months, a 10-month high, but the gains were uneven. Contractors working on data centers had about 12.2 months of backlog, roughly four months more than contractors without those jobs, according to ABC chief economist Anirban Basu. ABC also said 42% of contractors with more than $100 million in annual revenue are under contract for data center work, versus 7% of contractors below that threshold. (constructiondive.com) That gap suggests the current wave is favoring companies that can handle large sites, complex utilities and long procurement cycles. ### Why do bond yields matter for a construction story? U.S. Treasury yields rose again on May 19, with the 10-year note at 4.659% and the 30-year bond at 5.181%, its highest since October 2023, CNBC reported. (constructiondive.com) CNBC also said Japan’s 30-year government bond yield hit a record this week as investors sold long-dated debt on inflation and deficit concerns. Longer-dated yields feed directly into the cost of financing large projects, equipment purchases and lease-backed infrastructure. (constructiondive.com) Contractors are not the only ones exposed: developers, operators, landlords and specialized AI cloud providers all depend on access to capital. In that setting, firms with contracted demand and stronger financing channels are better placed to keep building. That reading is supported by ABC’s data showing the largest contractors are capturing most of the backlog growth. (cnbc.com) ### What should readers watch next? Nvidia is scheduled to report earnings on May 20, and its commentary on AI demand will be watched alongside construction and financing data for signs that the physical buildout is continuing. Contractors are also likely to keep pointing investors to hyperscaler spending, power-related work and backlog trends as the next markers of whether data center demand is holding up through the second half of 2026. (constructiondive.com) (cnbc.com)