AI-driven demand for high-capacity fiber networks connecting hyperscale data centers is creating a multiyear investment opportunity for MasTec's Communications segment, with revenue rising 18% in the first quarter.
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MasTec's fiber business gains 18% as AI data center demand surges
MasTec Inc.'s Communications segment generated $802 million in revenue during the first quarter of 2026, up 18% from a year earlier, as the company benefits from a structural shift in network infrastructure spending tied to artificial intelligence. The rapid buildout of AI data centers is driving demand for long-haul and metro fiber networks that interconnect these facilities with high bandwidth and low latency, creating what management described as a multiyear investment opportunity measured in the tens of billions of dollars.
"The need to interconnect hyperscale data centers with high-capacity, low-latency fiber networks could create a multiyear investment opportunity," MasTec management said, pointing to rising data consumption from cloud computing, streaming, gaming and connected devices. US data usage is projected to nearly double by 2030, the company noted.
Backlog reached another record during the quarter, rising 12% from the prior year, with management citing strong, broad-based demand for wireline services and increasing customer interest in multiyear turnkey infrastructure projects. The company expects Communications revenue of approximately $875 million in the second quarter while projecting low double-digit adjusted EBITDA margins. Margins were temporarily affected by costs associated with exiting certain DIRECTV fulfillment markets.
How MasTec Competes in the AI Infrastructure Race
MasTec is competing with Sterling Infrastructure Inc. and Quanta Services Inc. for a share of the AI buildout, though each company benefits from a different part of the investment cycle. Sterling Infrastructure is gaining from mission-critical site development for hyperscale data centers and semiconductor facilities, with its E-Infrastructure revenue surging 174% year over year in the first quarter and more than $5 billion in backlog and future-phase opportunities. Quanta Services is benefiting from power infrastructure investments — electric transmission, substations and generation capacity needed to serve rising electricity demand from data centers.
MasTec's differentiation lies in communications infrastructure: the fiber networks that connect AI campuses. While traditional telecom capital spending has been cyclical, management believes AI-driven fiber deployment represents a structural growth opportunity rather than a short-term recovery. The Broadband Equity, Access and Deployment program, or BEAD, provides additional government-backed revenue visibility for rural broadband and middle-mile fiber construction.
Valuation and Earnings Outlook
MasTec shares have surged 97.4% over the past six months, outperforming the broader construction sector and the S&P 500. The stock trades at 42.68 times forward earnings, a premium to industry peers. Earnings estimates have risen over the past 60 days, with analysts projecting 35.9% growth in 2026 and 35.3% in 2027.
The improving demand environment is already translating into operating results, and the combination of AI-driven data center interconnectivity, BEAD-funded broadband expansion and steadily increasing network traffic gives the Communications segment multiple long-duration demand drivers. As customers continue awarding larger turnkey fiber projects, MasTec is expected to capture a growing share of the infrastructure spending tied to the AI revolution.
This article is for informational purposes only and does not constitute investment advice.
