For Immediate Release
Chicago, IL – July 31, 2026 – Zacks Equity Research shares Sterling Infrastructure, Inc. STRL as the Bull of the Day and Tractor Supply Company TSCO as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Alphabet GOOGL, Broadcom AVGO and Eaton ETN.
Here is a synopsis of all five stocks.
Sterling Infrastructure, Inc.’s revenue and earnings are soaring as it helps physically build the AI data center boom and other pillars of the U.S. economy and Wall Street.
The AI data infrastructure company grew its GAAP earnings by ~525% between 2020 and 2025 and doubled its sales. STRL is projected to follow that up by doubling its revenue and its earnings again between 2025 and 2027 as the AI data center boom ramps up.
Despite mounting AI bubble fears, the AI hyperscalers such as Amazon and Meta are projected to spend ~$700 billion or more in AI-related capex in 2026 and ramp up again in 2027, after spending ~$400 billion in 2025.
Globally, companies are projected to spend ~$7 trillion on AI-focused capex by 2030, according to McKinsey. Tons of this AI-centric spending is ending up in the pockets of Sterling and other companies that are helping build the foundations of the 21st century economy.
Sterling’s FY26 and FY27 earnings estimates have doubled over the last 12 months, and its recent upward earnings revisions land the stock a Zacks Rank #1 (Strong Buy).
It's risky buying stocks ahead of earnings, and Sterling's Q2 results are due out after the closing bell on Monday, August 3. That said, STRL stock already tanked 50% from its June records to Wednesday’s closing price.
Sterling surged on Thursday as Wall Street dove back into all things AI after the wave of selling quickly recalibrated STRL to more reasonable levels. It found some support at its long-term 50-week moving average after hitting some of its most oversold RSI levels in the past 10 years.
The AI data center infrastructure standout is trading nearly in line with its Zacks sector and the S&P 500 (at 22.7X forward earnings) even though Sterling has soared ~9,300% in the past 10 years.
Best Stocks to Buy in August and Hold: AI Infrastructure Stock STRL
Sterling Infrastructure operates essential large-scale site development and services and mission-critical electrical services for AI data centers, semiconductor fabrication, manufacturing, e-commerce distribution centers, power generation, and more.
These five areas were some of the growth engines of the U.S. economy and Wall Street in recent years. They are also poised to remain the driving forces of the economy in the back half of the decade and beyond.
STRL, which traces its roots back to the 1950s, started transitioning to the higher-margin, growth-heavy firm it is today roughly a decade ago.
Sterling Infrastructure builds and improves the physical backbone of vital segments of the economy. STRL handles heavy site work such as development, site and storm drainage, grading, paving, environmental remediation, erosion control, water and sewer line installation, and much more.
Its Electrical & Mechanical business is focused on installing and maintaining electrical systems, HVAC, plumbing, and more, including technology infrastructure such as cabling, audio-visual, and beyond. STRL also provides on-demand service and repair solutions and “7x24x365” emergency services.
STRL operates across three core segments, E-Infrastructure, Transportation, and Building Solutions. The firm completed its acquisition of leading specialty electrical and mechanical contractor CEC Facilities Group in September 2025 to “significantly expand” its E-Infrastructure capabilities.
Sterling’s Transportation Solutions unit is focused on highways, bridges, airports, rail, and more. The Building Solutions segment is centered around concrete foundations for homes, parking structures, and commercial buildings.
The E-Infrastructure segment is by far its largest revenue contributor (59% in 2025, 72% in Q1 2026) and driver. E-Infrastructure revenue jumped up 59% YoY in 2025 and 72% in the first quarter of 2026, and its signed backlog increased 123% last quarter.
STRL said that “mission-critical projects, including data centers, manufacturing, and semiconductor facilities, represented over 90% of our E-Infrastructure backlog at quarter end.”
The AI Infrastructure Stock's Bullish Growth Outlook
The AI hyperscalers alone, including Microsoft and Meta, are projected to spend roughly $700 billion or more in AI-related capex in 2026 and ramp up again in 2027. Globally, companies are projected to spend $7 trillion on AI data center-focused capex by 2030, according to McKinsey.
The U.S. government, Wall Street, and big tech are racing to add more power to the grid to support the AI-boosted economy after decades of underinvestment. Tech titans such as Taiwan Semiconductor and Micron are also rushing to build chip manufacturing plants in the U.S., spurred by a huge push from the U.S. government.
AI growth, the reshoring of critical manufacturing, electrification, and more are set to boost U.S. electricity demand ~100% by 2050.
This backdrop helped Sterling double its revenue between 2020 ($1.23 billion) and 2025 ($2.49 billion), including 18% YoY growth in 2025. More importantly, STRL expanded its GAAP earnings per share by 525% between 2020 and 2025, soaring from $1.50 a share to $9.38 per share.
Sterling closed Q1 FY26 with a $3.8 billion backlog, up 78% YoY. Its E-Infrastructure signed backlog soared 123%, or 74% excluding CEC, which it bought in September 2025.
Looking ahead, Sterling is projected to grow its revenue by 59% in 2026 and another 29% in 2027 to reach $5.12 billion, more than doubling its 2025 total of $2.49 billion in the process.
STRL is expected to expand its adjusted EPS by 75% in 2026 and another 33% next year to soar from $10.88 a share in 2025 to $25.26 per share next year.
More Reasons to Buy AI Infrastructure Stock STRL
STRL stock has soared ~2,500% in the past five years to blow away its industry’s 115%, the S&P 500’s 70%, the construction sector’s 45%, and all the Mag 7 stocks from Nvidia to MSFT. This is part of a much larger surge over the past 10 years (+9,300%) and 25 years.
Sterling has surged 390% in the past two years and 85% YTD. Despite this run, investors can buy the AI data center infrastructure stock down roughly 43% from its peaks.
The stock has already undergone a healthy, much needed recalibration after it grew far too overheated amid the AI melt-up off the late March lows.
The stock found buyers on Thursday at its long-term 50-week moving average, its 200-day, and its pre-May gap-up highs. Investors who buy STRL stock now could experience a roughly 75% gain if it were to return to its early June peaks of around $1,005 a share.
Its massive 45% pullback, mixed with its strong earnings growth outlook, has it trading at a 65% discount to its recent highs at 22.7X forward 12-month earnings. Sterling is also trading at only a slight premium compared to its sector’s 19.4X and the S&P 500’s 19.8X despite its massive outperformance.
The company also sports a robust balance sheet, highlighted by its booming shareholders' equity. And all nine of the brokerage recommendations that Zacks has are “Strong Buys.”
Rural retail powerhouse Tractor Supply Company’s earnings outlook fell again after its Q2 earnings release on July 23.
The recent downturn extends a larger spiral of downward earnings revisions and lands TSCO stock a Zacks Rank #5 (Strong Sell).
Time for Investors to Stay Away from TSCO Stock?
Tractor Supply is the largest rural lifestyle retailer in the U.S. It operates roughly 2,500 Tractor Supply stores across 49 states.
The retailer sells farm and ranch supplies, pet and livestock products, tools, fencing, lawn and garden items, clothing, and other goods for farmers, ranchers, rural homeowners, and DIY customers.
TSCO’s earnings outlook has consistently fallen over the last several years as it faces multiple headwinds.
Tractor Supply is dealing with weaker demand for discretionary, seasonal, and big-ticket items, as well as other key setbacks, including its pet business.
The company is projected to see its earnings fall 4.4% YoY on 3% higher revenue. TSCO is projected to follow this up with 5% higher revenue next year and 8% YoY adjusted earnings growth.
That said, Tractor Supply missed our quarterly earnings estimates in six out of the past 10 quarters.
TSCO's fading earnings outlook and souring investor sentiment have pushed Tractor Supply stock down 40% YTD.
Some investors might want to put Tractor Supply stock on their watchlists. But it’s likely best to avoid buying TSCO stock until it shows some signs of a turnaround on the earnings front.
Additional content:
2 Stocks from Top Growth Sectors to Buy in August for the Rest of 2026
The month of July was turbulent for investors, thanks to growing concerns over whether hyperscalers can sustain record AI infrastructure spending while delivering attractive returns, renewed trade uncertainty and persistent geopolitical risks. Market sentiment deteriorated after Alphabet raised its 2026 capital expenditure guidance to $195-$205 billion from $180-$190 billion, prompting investors to question whether massive AI investments can continue generating attractive returns. The announcement triggered broad profit-taking across AI infrastructure and semiconductor stocks despite another quarter of robust cloud growth and healthy corporate earnings.
Macro Backdrop Supports Growth Sectors
As August approaches, while AI-related names are under pressure, the broader macro backdrop remains constructive. The Federal Reserve left the federal funds rate unchanged at 3.50%-3.75% in July, noting that inflation remains above its long-run target even as economic activity and labor market conditions continue to show resilience. Business investment has also remained healthy, supported by sustained spending on computing equipment, software and AI infrastructure, although higher borrowing costs continue to weigh on interest-rate-sensitive areas of the economy.
Why August Is the Right Time to Reposition Portfolios
With the market entering the second half of 2026, August presents an important opportunity for investors to reassess portfolio positioning. July's pullback has reset valuations across several growth areas without materially changing their long-term fundamentals.
As the earnings season progresses and investors look beyond near-term volatility, sectors supported by stable earnings growth, structural demand drivers and continued capital investment are likely to lead the market through the remainder of the year. Identifying these growth sectors, and the companies best positioned to benefit from them, could be key to generating attractive returns in the months ahead.
2 Growth Sectors to Buy for the Rest of 2026
We have identified two growth sectors, Technology and Industrial Products, and two constituent stocks, Broadcom and Eaton, which are best positioned to capitalize on them.
Technology: Broadcom
Technology stands out as the first sector to watch. July's weakness reflected concerns over AI capital spending and valuations rather than deteriorating demand. Enterprise adoption of generative AI continues to accelerate, with cloud providers, semiconductor companies, networking vendors and software firms benefiting from expanding AI workloads. Continued investment in AI infrastructure by hyperscalers, despite near-term investor scrutiny, reinforces the sector's long-term growth outlook.
Among individual stocks, Broadcom is an attractive play, benefiting from strong demand for custom AI accelerators, high-speed networking chips and VMware-driven software revenues, providing multiple growth drivers through the remainder of 2026. Although this Zacks Rank #2 (Buy) stock has slipped roughly 2% month to date amid the broader AI infrastructure-led selloff, its growth outlook remains exceptionally strong. The Zacks Consensus Estimate calls for fiscal 2026 earnings growth of 72.1% on 66% revenue growth, reflecting robust demand across both its semiconductor and infrastructure software businesses.
Industrial Products: Eaton
Industrial Products emerges as the second compelling opportunity. While AI has fueled unprecedented demand for semiconductors and cloud infrastructure, it is also driving investment in the physical equipment needed to power and operate data centers. Companies supplying electrical equipment, factory automation systems, power management solutions and advanced manufacturing technologies are poised to benefit from this multi-year capital spending cycle.
Eaton stands out as a key beneficiary as utilities and hyperscalers ramp up investments in electrical distribution, grid modernization and power management infrastructure. Although this Zacks Rank #2 stock has declined roughly 15% month to date amid the broader AI infrastructure-led selloff, its long-term fundamentals remain intact.
The Zacks Consensus Estimate calls for 2026 earnings growth of 10.6% on 15.9% revenue growth, underscoring continued strength in electrification, power management and AI-driven data center demand. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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