Is This Data Centre Construction Stock Trading at a Discount?

• Sterling’s signed backlog increased 116% y/y to $4.33bn at the end of Q2 2026, while its total addressable pool of work exceeded $7bn.

• The company has beefed up its M&A potential by expanding its borrowing capacity to up to $1.5bn in July.

• STRL fell 46% from its record high of $1,005 hit in June to around $548.95 on 12 August. Despite the pullback, the stock has gained more than 89% over the past year.

Sterling Infrastructure [STRL] is a site development and electrical services company serving data centres, semiconductor fabrication sites, warehouses, highways, airports, and residential and commercial building projects.

On 4 June, the STRL share price hit an all-time high of about $1,005, having entered 2026 at around $306. Since then, the stock has fallen 46% to $548.95, as of 12 August, amid concerns over valuation and Sterling’s capacity to meet growing demand.

For investors previously discouraged by STRL’s expensive valuation, the sell-off provides food for thought. The pullback occurred despite continued demand strength, as showcased by a 116% year-on-year jump in its signed backlog to $4.33bn at the end of Q2 2026.^[1]

Whether the rally can resume may depend on how quickly Sterling can expand capacity and capitalise on growing demand from the US AI infrastructure boom.

In this stock analysis, we examine how Sterling Infrastructure plans to make the most of the generational opportunity that boom represents.

Sterling Infrastructure is no longer the highway and housing company it was once seen as. Its current valuation increasingly reflects its exposure to rising US data centre spending.

Goldman Sachs expects US data centre capacity to reach roughly 95GW by 2027, more than double the level at the end of 2025. If this comes to pass, it would require new data centre construction and expansion of existing campuses, creating more potential work for companies such as Sterling.^[2]