Group 1 - Jacobs Solutions Inc. is recognized as a relatively cheap stock within the S&P 500, with strong growth prospects driven by its involvement in advanced projects such as data centers and pharmaceutical plants [1][2] - The company is projected to achieve 16% earnings growth next year, with its stock currently priced at 21.5 times the 2026 earnings estimates [1] - Jacobs Solutions has benefited from the AI data center boom, which has emerged as a significant growth driver following a successful merger breakup last year [2] Group 2 - The company provides a range of services including consulting, design, engineering, project management, and long-term facility operations [2] - There is a recognition that while Jacobs Solutions has potential as an investment, certain AI stocks may offer greater upside potential with less downside risk [2]

Core Insights - The panel discussion focuses on the increasing importance of water and land efficiency due to rising temperatures, growing global populations, and resource security concerns [1] Group 1: Industry Challenges - There is a heightened focus on addressing issues related to water supply, including both excess and scarcity, while minimizing environmental impacts [1] - The discussion highlights the need for reliability in resource supply amidst these challenges [1] Group 2: Expert Contributions - The panel features experts from various sectors, including Susan Moisio from Jacobs Solutions, which is recognized as a leader in water infrastructure [2] - Matt Diserio represents Water Asset Management, an investment firm dedicated to water-related investments [2] - Ara Erickson from Weyerhaeuser contributes insights from a major land and timber management perspective [2]

Summary of Jacobs Solutions Conference Call - September 25, 2025 Industry Overview - The conference focused on water and land efficiency, addressing challenges related to climate change, resource security, and environmental impacts [1][2] - Key participants included representatives from Jacobs Solutions Inc., Water Asset Management, and Weyerhaeuser, highlighting the interconnectedness of water and land management [1][2] Jacobs Solutions Inc. Insights - Jacobs adopts a "one-water" approach, emphasizing the value of all water and managing it through the complete asset lifecycle from planning to operations [3][4] - Major demand drivers for Jacobs include climate change effects leading to both water scarcity and excess, as well as water quality issues [4] - Jacobs is focused on digital solutions to enhance operational efficiency in water and wastewater management [4][32] Weyerhaeuser's Approach - Weyerhaeuser integrates sustainable forestry practices with land stewardship, emphasizing the connection between forests and water quality [5][6] - The company uses KPIs such as riparian buffer sizes to measure water quality protection efforts [8] - Weyerhaeuser has invested in high-yield forestry to increase productivity and adapt to climate conditions, ensuring sustainable wood supply [15][16] Investment Perspectives - Water Asset Management focuses on global listed water-related equities and water resources, identifying significant value in U.S. water utility infrastructure [10][11] - The firm highlights the privatization of water utility systems as a growing opportunity, with many governments recognizing the need for private sector expertise [11] - Investment strategies include acquiring farmland with senior water rights and transitioning to less water-intensive crops, saving approximately 80% of water [12][25] Economic and Technological Innovations - Sustainable water and land management economics were discussed, with emphasis on long-term investments in green infrastructure [18][19] - Jacobs has developed technologies like Replica for watershed management and Intelligent O&M for efficient treatment plant operations [32][33] - Weyerhaeuser employs advanced analytics for monitoring forest conditions and adapting planting strategies to changing climates [27][29] Future Outlook - All participants expressed optimism for increased investment in water and land efficiency solutions over the next year [50][51][52] - The importance of regulatory frameworks in driving water supply reliability and investment was emphasized, alongside the potential of solar energy and data centers to create value from land [36][38] Key Takeaways - The interconnectedness of water and land management is critical for addressing climate change and resource efficiency [1][2] - Companies are leveraging technology and sustainable practices to enhance operational efficiency and environmental stewardship [32][36] - Investment opportunities in water-related assets are growing, with a focus on long-term sustainability and adaptation strategies [10][11][42]

Core Insights - Jacobs has been selected by the Los Angeles Community College District (LACCD) to continue providing program management services for its $15.1 billion BuildLACCD Bond Program, which aims to modernize academic infrastructure across nine colleges [1][2] - The five-year contract will support critical facility, housing, and athletic infrastructure projects benefiting approximately 250,000 students and faculty members [2][3] - Jacobs has a strong track record, having completed nearly 200 projects and initiated 475 new construction and modernization projects over the past seven years [3] Company Overview - Jacobs is ranked No. 2 in Program Management by Engineering News-Record and has extensive experience in managing complex infrastructure projects across various educational institutions [4] - The company operates in over 15,000 learning environments, supporting about one in eight schools in the U.S. to enhance campus facilities for innovation and student success [4] - Jacobs generates approximately $12 billion in annual revenue and employs nearly 45,000 people, providing end-to-end services in multiple sectors including advanced manufacturing, energy, and environmental services [5]

Core Insights - The current market presents a challenge for investors seeking safe places to allocate new capital, as the S&P 500 is experiencing record highs and significant rallies [1] - There are still opportunities to find relatively inexpensive stocks with above-average growth potential, particularly within the S&P 500 [2] Stock Selection - A screen identified 104 S&P 500 stocks with above-average growth and below-average price multiples, narrowing down to 86 after excluding energy and materials sectors [3][4] - T-Mobile is highlighted for its expected 19.4% earnings growth next year, trading at just over 18 times next year's earnings [4] - Royal Caribbean and Expedia are noted as strong travel stocks, with Expedia projected to grow earnings by 18% next year while trading at 13 times earnings, significantly cheaper than Booking Holdings [5] - Dollar Tree is identified as a consumer staples stock with a 15% growth rate, trading at less than 15 times next year's earnings, making it a favorable option [6] Financial Sector Opportunities - The financial sector is experiencing favorable conditions, with 34 of the 86 identified stocks coming from this sector [7] - Capital One Financial is projected to have nearly 14% earnings growth next year, trading at roughly 11 times next year's earnings [8] - American Express is expected to grow earnings by 12.6% next year, trading at less than 20 times earnings, which is cheaper than the overall S&P [9] - Citigroup is highlighted for its strong recovery under CEO Jane Fraser, with expected growth of 28% next year while trading at just 10.5 times earnings [10] - Keycorp, a regional bank, is expected to grow at 22% next year, trading at just under 11 times next year's earnings [11] Other Notable Stocks - Charles Schwab is recognized as a strong retail brokerage, while Apollo is noted for its leadership in private equity and private credit with projected earnings growth of 19% [12][13] - Insight, a biopharma company, stands out in the healthcare sector with expected earnings growth of 19% and trading at just under 12 times next year's earnings [14] - Caterpillar is noted for its strong performance, with an expected 18% earnings growth and trading at 22 times next year's earnings [15] - Dell Technologies is mentioned as a core player in AI infrastructure, while BXP, a real estate company, has rebounded after trimming its dividend to focus on growth projects [18][19] - Energy, a utility company, is highlighted for its growth potential due to infrastructure projects, including a $10 billion data center by Meta [20]

Company Overview - Jacobs Solutions Inc. has a market cap of $17.6 billion and is a global leader in professional services, including consulting, technical, scientific, and project delivery solutions [1] - The company operates across various sectors such as advanced manufacturing, cities and places, energy, environmental, life sciences, transportation, and water [1][2] Market Position - Jacobs Solutions is classified as a large-cap stock, emphasizing its size, influence, and dominance in the engineering and construction industry [2] - The company's diverse service offerings and focus on innovation position it well to tackle complex global challenges for its clients [2] Stock Performance - Jacobs shares have decreased by 1.8% from their 52-week high of $152.40, reached on August 13 [3] - Over the past three months, Jacobs stock has increased by 17.5%, outperforming the iShares U.S. Infrastructure ETF's (IFRA) rise of 8.9% [3] - Year-to-date, Jacobs shares have surged by 12%, and over the past 52 weeks, they have climbed by 23.4%, compared to IFRA's YTD gains of 12.5% and 12.9% returns over the last year [4] Financial Performance - On August 5, Jacobs reported third-quarter earnings, with revenue increasing by 5.1% year-over-year to $3 billion, exceeding analyst expectations of $2.2 billion [5] - The adjusted EPS rose by 24.6% to $1.62, surpassing Wall Street estimates [5] - The company also reported a 14% increase in its backlog, reaching a record high, indicating strong forward demand [5] Future Guidance - Following the positive earnings results, Jacobs management raised its fiscal 2025 guidance for the second time, now expecting adjusted net revenue growth of approximately 5.5% year-over-year and adjusted EPS in the range of $6.00 to $6.10 [6] - Key competitor TopBuild Corp. has shown resilience with a 34.5% return on a year-to-date basis, although it lagged behind Jacobs with a 5.2% gain over the past 52 weeks [6]

Group 1 - Jacobs Solutions Inc. is recognized as a beneficiary of the AI data center boom, with its data center exposure becoming a significant growth driver for the company [1] - The company has evolved from a one-man chemical engineering consulting business founded in 1947 to one of the largest engineering design firms globally, employing over 45,000 people [2] - Jacobs Solutions underwent a complicated merger breakup deal last year, which was successful and has positioned the company for further growth [1][2] Group 2 - While Jacobs Solutions is acknowledged as a potential investment, there are opinions suggesting that other AI stocks may offer greater upside potential and carry less downside risk [3]

Core Insights - Jacobs has been selected by the Puerto Rico Aqueduct and Sewer Authority (PRASA) to design the Mayagüez Ocean Outfall Replacement as part of PRASA's Capital Improvement Program aimed at modernizing Puerto Rico's water infrastructure [1][2] - The new pipeline, measuring 1.1 miles (1.8 kilometers), will replace a system that was severely damaged during Hurricane María, focusing on resilience and environmental impact reduction [2][3] - Jacobs emphasizes the importance of resilient infrastructure in protecting communities and ecosystems against climate-driven challenges, leveraging advanced analysis and construction strategies [3][4] Company Background - Jacobs has a significant presence in Puerto Rico, managing PRASA's capital program and engaging in critical infrastructure projects, including work at Luis Muñoz Marín International Airport [4] - The company has extensive global experience in resilient infrastructure, with projects ranging from the Port of San Francisco Waterfront Resilience Program to recovery efforts in the Philippines and U.S. Virgin Islands [4][5] - Jacobs operates with approximately $12 billion in annual revenue and a workforce of nearly 45,000, providing comprehensive services across various sectors including water, energy, and environmental solutions [5]

Core Viewpoint - The AI data center boom is creating unexpected winners in the engineering construction sector, exemplified by Jacob Solutions, which is experiencing significant growth due to its data center exposure [1]. Company Overview - Jacob Solutions has been involved in the data center space since 2007, initially focusing on conventional data centers and evolving into AI data centers, which are more complex and require specialized expertise [3][4]. - The company successfully navigated a complicated merger breakup last year and has continued to grow since then, with both Jacob Solutions and the new company Amentum performing well [5][6]. Data Center Business - Jacob Solutions is one of the few companies capable of building AI data centers, which are complex facilities that require a deep understanding of various systems [2][4]. - The company has developed a digital twin technology that allows for the simulation of data center operations, optimizing power and cooling requirements, which can lead to cost savings for customers [7][10]. Technological Integration - The digital twin technology integrates various components of the data center, such as compute load and utility requirements, allowing for better design and operational efficiency [8][10]. - Jacob Solutions collaborates with companies like Nvidia to create reference designs for large facilities, ensuring that the infrastructure can support rapid innovations in computing technology [8][11]. Power Management - The company assesses the power requirements for data centers and explores various power sources, including grid connections and alternative sources like nuclear and LNG, to ensure adequate supply [12][13]. - Jacob Solutions is adept at managing the complexities of power needs, including the use of batteries during peak loads, which is crucial for the operation of large data centers [13][14].

One thing I love about the AI data center boom is that it just keeps creating winners in unexpected places. Take Jacob Solutions. It's the engineering construction firm that went through a complicated merger breakup deal last year that was very successful but is now cleaning up thanks in large part to its data center exposure which has become a major growth driver for the company.Don't take it from me though. Let's check in with Bob Pad. He's the chairman and CEO of Jacob Solution more.Mr. . Bard, welcome b ...