Mechanical and electrical services contractor Comfort Systems USA (FIX +2.54%) may not be the best-known stock on the market, but it is a key player in the artificial intelligence (AI) data center build-out.
The stock is up 77% this year and an incredible 871% over the last three years, largely due to its exposure to the AI data center build-out boom and the impact on the company’s backlog.
Image source: Getty Images.
Comfort Systems USA backlog
The chart below shows the remarkable growth in its backlog over the last few years. For reference, Wall Street analysts expect revenue of just under $13 billion in 2026, so the current backlog of $14.06 billion more than covers 2026 revenue and continues to grow. It’s likely to do so given the massive sums that hyperscalers continue to commit to building out AI data centers.
The data-center-related revenue is reported with its technology revenue and, according to President Trent McKenna on an earnings call in July, “Technology, which is included in industrial, was 58% of our revenue, a substantial increase from 40% in the prior year.”
Data source: Comfort Systems USA presentations. Chart by author.
The backlog doesn’t show the full picture
It’s also worth noting that Comfort’s backlog is arguably a conservative metric that doesn’t reflect a stronger long-term picture. Comfort’s backlog “reflects revenue still to be recognized under contracted or committed installation and replacement project work,” according to the company. This work generally lasts less than one year. The backlog does not include service work or maintenance contracts, which “do not flow through backlog.” As such, the backlog doesn’t fully reflect the benefit Comfort Systems will get from its project work.
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On the other hand, the backlog has a relatively short duration given that project work lasts less than one year. Still, that won’t trouble investors as long as the backlog keeps growing; an increasing backlog simply translates into revenue growth and a long tail of service and retrofit opportunities in the future.
Lee Samaha has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Comfort Systems USA. The Motley Fool has a disclosure policy.
