Core Viewpoint - The article discusses the best growth stocks to buy and hold for the long term, highlighting a positive outlook for equity markets amid a resilient US economy and low-interest-rate environment [1][4]. Group 1: Market Outlook - Global equities are expected to continue rising despite valuation concerns, with a Bank of America survey indicating that most fund managers remain overweight in equities [1][2]. - The risk of a recessionary trade war is diminishing, contributing to a bullish sentiment in equity markets [2]. - The US Federal Reserve's hints at potential interest rate cuts further enhance the outlook for growth stocks, which typically trade at a premium [2][3]. Group 2: Methodology for Stock Selection - The selection of the best growth stocks involved using the Finviz screener to identify stocks with over 10% EPS growth in the past five years and an expected EPS growth rate of at least 20% over the next five years [6]. - The list was narrowed to stocks with a forward price-to-earnings ratio exceeding 20 and popularity among elite hedge funds in Q2 2025 [6][7]. Group 3: Featured Growth Stocks - **Comfort Systems USA, Inc. (NYSE:FIX)**: - EPS Growth Over the Past Five Years: 36.52% - EPS Growth Over the Next Five Years: 24.58% - Forward Price to Earnings Ratio: 30.31 - Number of Hedge Fund Holders: 53 - UBS raised its price target to $875, citing strong financial health and a robust project environment [8][9][10]. - **Howmet Aerospace Inc. (NYSE:HWM)**: - EPS Growth Over the Past Five Years: 22.24% - EPS Growth Over the Next Five Years: 23.36% - Forward Price to Earnings Ratio: 44 - Number of Hedge Fund Holders: 57 - The company is experiencing healthy growth in its spares business and is investing in capacity expansion to meet demand [12][13][14][15]. - **DexCom, Inc. (NASDAQ:DXCM)**: - EPS Growth Over the Past Five Years: 39.06% - EPS Growth Over the Next Five Years: 24.59% - Forward Price to Earnings Ratio: 26.07 - Number of Hedge Fund Holders: 60 - UBS maintains a bullish stance on the company despite concerns over its G7 continuous glucose monitoring sensor, expecting strong demand for CGM technology [16][17][18][19].

Group 1: AI and Market Trends - The AI-driven bull run of 2023 and 2024 is continuing into 2025, with stock prices of AI-centric companies increasing by 200-300% [1] - Hyperscalers are increasingly opting for data center installations to support the growth of cloud computing [1] Group 2: Old Economy Stocks - Several old economy stocks from sectors such as industrials, finance, auto, materials, and construction have shown significant year-to-date gains [2] - Investing in these stocks with a favorable Zacks Rank is expected to lead to profits and offers opportunities for portfolio diversification [2] Group 3: Selected Old Economy Stocks - Five old economy stocks have rallied more than 30% year to date and have favorable Zacks Ranks indicating further upside potential: Comfort Systems USA Inc. (FIX), MasTec Inc. (MTZ), JPMorgan Chase & Co. (JPM), GE Aerospace (GE), and Howmet Aerospace Inc. (HWM) [3] Group 4: Comfort Systems USA Inc. (FIX) - Comfort Systems USA is a national provider of HVAC services, primarily in commercial and industrial markets [6] - The demand for specialized HVAC solutions is driven by the data center boom, particularly for AI and cloud computing [7] - FIX has an expected revenue growth rate of 15.5% and earnings growth rate of 52.4% for the current year [10] Group 5: MasTec Inc. (MTZ) - MasTec is an infrastructure construction company benefiting from the AI data center boom and trends in electrification and reshoring [11][14] - MTZ operates in multiple segments, including communications, power delivery, pipeline infrastructure, and clean energy [13] - The company has an expected revenue growth rate of 13.6% and earnings growth rate of 60% for the current year [14] Group 6: JPMorgan Chase & Co. (JPM) - JPMorgan Chase's net interest income growth is projected to witness a CAGR of 2.9% by 2027, driven by business expansion initiatives and loan demand [15] - The company emphasizes the importance of AI in boosting efficiency, with a technology budget of $18 billion for the year [16] - Expected revenue and earnings growth rates for JPM are -0.2% and -0.6%, respectively, for the current year [17] Group 7: GE Aerospace (GE) - GE Aerospace is experiencing strong demand for commercial engines and defense-related products, supported by rising defense budgets and geopolitical tensions [18] - The company plans to invest over $1 billion in MRO facilities globally over the next five years [19] - Expected revenue and earnings growth rates for GE are -4.4% and 27.6%, respectively, for the current year [20] Group 8: Howmet Aerospace Inc. (HWM) - Howmet Aerospace is benefiting from robust momentum in the commercial aerospace market and rising defense budgets [21] - The company has a strong liquidity position that supports shareholder-friendly policies [22] - Expected revenue and earnings growth rates for HWM are 9.4% and 32.7%, respectively, for the current year [22]

Core Insights - The engineering, contracting, and building systems services market is experiencing robust demand driven by government initiatives and infrastructure spending globally [1][2] - Recent Federal Reserve rate cuts are expected to further enhance market conditions by lowering financing costs, encouraging investments in large-scale projects [2] Comfort Systems USA, Inc. (FIX) - Comfort Systems has a market capitalization of approximately $28.99 billion and is benefiting from strong demand in industrial and technology-driven construction [4] - The company's backlog reached a record $8.12 billion as of June 30, 2025, up from $5.77 billion the previous year, indicating strong booking momentum [4][9] - Recent acquisitions, including Right Way Plumbing & Mechanical LLC for $64.8 million, are expected to contribute $60-$70 million annually in revenues, enhancing market share [5] - The company increased its quarterly dividend by five cents to 50 cents per share, reflecting positive investor sentiment and commitment to shareholder value [6] - FIX's projected EPS growth for 2025 is 52.4%, significantly higher than AECOM's 15.9%, with a trailing ROE of 39.33% compared to AECOM's 27.87% [9][20] AECOM (ACM) - AECOM has a market capitalization of approximately $17.61 billion and is capitalizing on infrastructure demand both domestically and internationally, particularly in the UK, Canada, and the Middle East [10][11] - The company's backlog reached $24.59 billion, up 5% from the previous year, supported by strong infrastructure demand [10][9] - AECOM is positioned to benefit from significant infrastructure investments announced by the UK government, totaling GBP 725 billion, and ongoing projects in the Middle East [11] - The company is also focusing on growth in key segments such as AI, water, and transportation, with expectations of tripling U.S. data center investments by 2030 [12] - Despite growth opportunities, AECOM faces risks related to government funding and international regulatory changes [13] Comparative Analysis - Comfort Systems is showing a stronger growth trajectory with a higher backlog, better EPS growth projections, and superior ROE compared to AECOM [22][24] - AECOM, while benefiting from global infrastructure opportunities, has a more moderate growth outlook and is more exposed to government spending risks [24][25] - Overall, Comfort Systems is viewed as a better investment opportunity due to its operational efficiency, record backlog, and upward-trending estimates [25]

Core Insights - Comfort Systems USA, Inc. reported record revenues of $2.17 billion for Q2 2025, reflecting a 20% year-over-year increase, with earnings per share rising 75% to $6.53, indicating strong project execution and margin expansion [1][9] Financial Performance - The mechanical services segment achieved gross margins of 22.9%, up from 19.2% a year earlier, driven by disciplined project selection and efficiency improvements [2] - Service revenues grew by 10%, now accounting for 15% of total sales, providing stable cash flows [2] - The company generated over $220 million in free cash flow during Q2 2025 and maintained a net cash position of $250 million [4] Backlog and Demand - Comfort Systems has a record backlog of $8.1 billion, up 41% year-over-year, with significant demand from industrial and technology sectors, particularly in data center construction [3][9] - The company is investing in modular capabilities to enhance construction efficiency and capture growth opportunities [3] Competitive Positioning - Compared to peers like EMCOR Group, Comfort Systems is more leveraged to high-demand technology projects, particularly in mechanical services [6] - Quanta Services, while not a direct competitor, provides stability through its focus on long-cycle infrastructure spending, highlighting Comfort Systems' unique positioning in technology-driven construction [7] Stock Performance and Valuation - Comfort Systems' shares have increased by 60.1% over the past three months, contrasting with a 3.4% decline in the Zacks Building Products - Air Conditioner and Heating industry [8] - The company trades at a forward price-to-earnings ratio of 34.44X, higher than the industry average of 26.42X [12] Earnings Estimates - Earnings estimates for 2025 and 2026 have increased by 2% and 2.4%, respectively, indicating expected year-over-year growth of 52.4% for 2025 and 9.9% for 2026 [15]

Group 1: AI and Data Center Growth - The demand for data center capacity is surging due to the growth of AI and cloud computing, with global AI-powered data center infrastructure capex projected to reach around $7 trillion by 2030 [1] - Data centers are expected to increase from 4% of total U.S. power demand in 2023 to over 12% by 2030, necessitating a significant expansion of electricity supply [10] Group 2: Company Recommendations - Three non-technology U.S. companies are recommended for investment due to their potential benefits from the AI-driven data center boom: MasTec Inc. (MTZ), Comfort Systems USA Inc. (FIX), and Talen Energy Corp. (TLN) [2] Group 3: Comfort Systems USA Inc. (FIX) - Comfort Systems USA is a national provider of HVAC services, primarily in commercial and industrial markets, and is well-positioned to benefit from the demand for specialized HVAC solutions in data centers [3][4] - The company has an expected revenue growth rate of 15.5% and an earnings growth rate of 52.4% for the current year, with a recent 2% improvement in the Zacks Consensus Estimate for current-year earnings [5] Group 4: Talen Energy Corp. (TLN) - Talen Energy is an independent power producer that operates various types of power plants and is developing battery storage projects [6] - The company has expanded its nuclear energy partnership with Amazon to supply 1,920 megawatts of carbon-free power to AWS data centers through 2042, benefiting from the demand for reliable and clean energy [7][8] - Talen Energy has an expected revenue growth rate of 11.7% but a negative earnings growth rate of -38.8% for the current year, with a recent 0.9% improvement in the Zacks Consensus Estimate for current-year earnings [11] Group 5: MasTec Inc. (MTZ) - MasTec is an infrastructure construction company that provides services for communications, energy, and utility infrastructure, benefiting from the expansion of the energy industry to support AI and reshoring [12] - The company is a leading provider of design, construction, and maintenance services in the wireless network space, which is crucial for AI-driven products [13] - MasTec has an expected revenue growth rate of 13.6% and an earnings growth rate of 58% for the current year, with a recent 2.6% improvement in the Zacks Consensus Estimate for next year's earnings [15]

Core Insights - Comfort Systems USA, Inc. (FIX) is experiencing strong demand in industrial and technology-driven construction, with a record backlog and increasing involvement in large-scale projects [1][3][5] Financial Performance - In Q2 2025, Comfort Systems reported revenues of $2.2 billion, a 20% year-over-year increase, and adjusted earnings per share rose 75% to $6.53 [3][10] - Industrial work constituted 63% of total revenues, while technology-related projects accounted for 40% [3][10] - The backlog reached a record $8.12 billion, up from $5.77 billion a year earlier, indicating strong booking momentum [3][10] Market Conditions - The Federal Reserve's recent reduction of the key lending rate by 25 basis points is expected to lower financing costs, encouraging investment in large-scale projects [2] - This monetary policy shift may further support demand in the industrial and institutional markets that Comfort Systems serves [2][5] Growth Opportunities - Modular construction is gaining traction, representing 18% of revenues year-to-date, with capacity projected to reach 3 million square feet by early 2026 [4] - Service revenues increased by 10% in Q2 2025, providing a reliable cash flow buffer [4] Competitive Position - Comfort Systems is well-positioned to capitalize on industrial growth opportunities, supported by solid fundamentals and favorable macroeconomic conditions [5] - The company's focus on complex, large-scale projects aligns with the expansion of manufacturers and resilient institutional markets like healthcare [3][5] Valuation and Estimates - Comfort Systems trades at a forward price-to-earnings ratio of 32.95X, compared to the industry average of 25.97X [13] - Earnings estimates for 2025 and 2026 have increased by 2% to $22.25 per share and 2.4% to $24.45, respectively, indicating year-over-year growth of 52.4% and 9.9% [15]

Group 1 - ClearBridge Investments reported a strong rebound in U.S. equities during Q2 2025, with the S&P 500 Index returning 10.9% and the Russell 3000 Index advancing 11.0% due to improved risk sentiment following a pause in tariff implementation [1] - The ClearBridge Select Strategy outperformed its benchmark in Q2 2025, attributed to effective portfolio construction across various companies and sectors with distinct growth drivers [1] - Comfort Systems USA, Inc. (NYSE:FIX) was highlighted as a key stock, achieving a one-month return of 9.93% and a remarkable 100.62% increase in value over the past 52 weeks, closing at $762.91 per share with a market capitalization of $26.917 billion [2] Group 2 - Comfort Systems USA, Inc. benefits from the growing focus on AI and the necessary infrastructure investments, providing HVAC and electrical systems installation and maintenance, which helped mitigate weaknesses in more cyclical industrial positions [3] - In Q2 2025, Comfort Systems USA, Inc. reported revenue of $2.2 billion, reflecting a $363 million increase or 20% growth compared to the previous year, with 53 hedge fund portfolios holding its stock, up from 48 in the previous quarter [4]

Group 1 - TimesSquare Capital Management's "U.S. Small Cap Growth Strategy" reported a gross return of 11.28% and a net return of 11.02% for Q2 2025, compared to the Russell 2000 Growth Index's return of 11.97% [1] - The fund's performance was driven by double-digit returns in equities as global economic activity improved [1] - Comfort Systems USA, Inc. (NYSE:FIX) was highlighted as a key stock, with a one-month return of 9.02% and a 52-week gain of 121.85%, closing at $752.10 per share with a market capitalization of $26.535 billion [2] Group 2 - Comfort Systems USA, Inc. provides essential mechanical and electrical services, and its stock price surged by 67% due to strong quarterly results [3] - The company reported revenue of $2.2 billion for Q2 2025, reflecting a $363 million increase or 20% year-over-year [4] - Despite the potential of Comfort Systems USA, Inc. as an investment, there are suggestions that certain AI stocks may offer greater upside potential with less downside risk [4]

Core Insights - Comfort Systems USA, Inc. (FIX) has experienced a significant stock price increase of 118.6% over the past six months, outperforming the Zacks Building Products – Air Conditioner and Heating industry growth of 14.1%, the broader Construction sector's growth of 19.7%, and the S&P 500's rally of 17.7% [1][5]. Group 1: Demand and Revenue Growth - The company is benefiting from strong demand in technology and industrial markets, with a record backlog of $8.12 billion as of Q2 2025, up from $5.77 billion a year earlier, indicating robust growth visibility [2][10]. - In Q2 2025, industrial customers accounted for 63% of total revenues, while technology projects represented 40%, an increase from 31% a year earlier, highlighting the company's ability to capture opportunities in high-growth markets [7][8]. Group 2: Service Operations and Stability - Service operations are a reliable growth engine for Comfort Systems, contributing over 10% growth in service revenues in Q2 2025 and representing 15% of total revenues, which enhances overall profitability and provides steady cash flow [11][12]. Group 3: Strategic Acquisitions - Recent strategic acquisitions, including the purchase of Right Way Plumbing, are broadening the company's capabilities and market presence, expected to contribute $60-$70 million to annual revenues [13][14]. Group 4: Valuation and Earnings Estimates - Comfort Systems is currently trading at a forward P/E ratio of 31.02X, which is a premium compared to some industry peers, but the upward trend in earnings estimates for 2025 and 2026 suggests continued growth potential [15][18]. - The earnings estimates for 2025 and 2026 have increased to $21.82 per share and $23.69, indicating year-over-year growth of 49.5% and 8.6%, respectively [18].

Market Overview - The stock market experienced significant volatility in Q2 2025, with the S&P 500 reaching an all-time high by the end of June despite a 7% drop from April 2 to April 7 due to the liberation day tariff announcement [1] - The market rebounded, gaining over 22% from the April 7 low through the end of June, with the Russell 1000 Growth returning 17.8% and the S&P 500 returning 10.9% in the quarter [1] - Large-cap stocks significantly outperformed small-cap stocks, and growth stocks outperformed value stocks [1] Renaissance Large Cap Growth Strategy Performance - The strategy outperformed the S&P 500 Index but underperformed the Russell 1000 Growth benchmark [1] Company Spotlight: Comfort Systems USA, Inc. (NYSE:FIX) - Comfort Systems USA, Inc. reported a one-month return of 4.78% and a 52-week gain of 120.22%, closing at $709.53 per share with a market capitalization of $25.954 billion on September 09, 2025 [2] - The company demonstrated solid quarterly operating results, indicating an acceleration in organic revenue growth and highlighting incremental margin opportunities [3] - Backlog growth is accelerating, and management emphasized a new business pipeline, addressing concerns about slowing demand for data center construction, service, and maintenance [3] Financial Performance - In Q2 2025, Comfort Systems USA, Inc. reported revenue of $2.2 billion, an increase of $363 million or 20% compared to the previous year [4] - The company was held by 53 hedge fund portfolios at the end of Q2 2025, up from 48 in the previous quarter [4]