Industry Overview - Global infrastructure spending is expected to remain strong through year-end 2025, driven by aging assets, energy transition mandates, grid resiliency needs, and data-center capacity expansion [1] - The infrastructure cycle now encompasses not only traditional roads and bridges but also transmission, distribution, electrification, water, and mission-critical facilities [1][9] United States Infrastructure - The Infrastructure Investment and Jobs Act (IIJA) allocates approximately $350 billion for federal highway programs from fiscal 2022 to 2026, providing visibility into public works spending [2] - Grid modernization is being recognized as a capital "super-cycle," with significant multi-year spending plans linked to reliability and load growth from electrification and data centers [2] European Infrastructure - European policymakers are prioritizing faster approvals for grid projects to enhance competitiveness, with Germany's construction industry anticipating a recovery in civil works driven by a substantial infrastructure investment plan [3] - The Central Association of the German Construction Industry (ZDB) forecasts a slight real increase in sector turnover of 0.6% this year, followed by a 2.5% surge in 2026 [3] Company Highlights - **Jacobs Solutions (J)** is leveraging its engineering and program-management capabilities, with a record backlog and rising demand in public infrastructure, data centers, and advanced manufacturing [4] - **Dycom Industries (DY)** is benefiting from fiber deployment and wireless programs, with a record backlog and a focus on digital infrastructure build-out expected to ramp significantly starting in 2026 [5][6] - **Sterling Infrastructure (STRL)** is successfully pivoting towards higher-margin infrastructure markets, particularly in E-Infrastructure Solutions, with strong backlog growth and visibility extending into 2026 [10][11] - **MasTec (MTZ)** offers a diversified infrastructure platform, with strong execution in communications and power delivery, and significant capital commitments expected to ramp in 2026 [13][14] - **EMCOR Group (EME)** is noted for its margin resilience and expanding exposure to data centers, with record performance obligations driven by network and data center projects [16][18] - **Quanta Services (PWR)** is positioned at the center of a capital-intensive infrastructure cycle, with record backlog driven by investments in transmission, generation, and electrification [20][21] Stock Performance - Dycom stock has increased by 101.6% year-to-date, with EPS estimates for fiscal 2026 and 2027 rising significantly [7] - Sterling stock has gained 89.4% year-to-date, with EPS estimates for 2026 also showing notable growth [12] - MasTec stock has risen by 61.9% year-to-date, with EPS estimates reflecting a 27.3% growth [15] - EMCOR stock has increased by 37.5% year-to-date, with EPS estimates indicating an 8.6% growth [19] - Quanta stock has gained 37.9% year-to-date, with EPS estimates showing a 16.9% growth [22]

Investment Recommendation - The firm has a buy rating on Cisco stock with a $76 price target, representing an approximate 5% increase from the current trading price [1][2] - The current price target may be adjusted based on the upcoming earnings report and future expectations [3] - Investors have the option to consider further upside potential or determine if the stock has reached its peak [4] Market Dynamics and Growth Drivers - The industry is experiencing an infrastructure cycle, evidenced by positive results and raised guidance from companies like Arista and Sienna [1] - Cisco's cloud orders doubled last quarter, increasing from $350 million to $600 million, with expectations for continued growth [2] - The infrastructure cycle is expected to drive revenue, profits, and share prices [2] - AI and data growth are key drivers of the infrastructure boom, extending beyond cloud [7] Networking Segment Performance - Networking accounts for approximately 70% of Cisco's product revenues [5] - Order growth in networking has been outpacing revenue growth in recent quarters [6] - Revenue growth in networking is expected to accelerate this quarter, with guidance anticipated to increase in subsequent quarters due to strong historical order growth [6]