In this article, we will look at the 10 Best Engineering Stocks to Buy for 2025.
Overview of the Engineering Industry
The engineering industry is playing an increasingly significant role in today’s tech-supported world. The demand for engineering solutions is increasing globally, and this trend is expected to continue into 2025. Investments in clean energy, urban development, and transportation are driving this demand, presenting a scalable opportunity for investors to benefit from engineering companies’ potential.
According to a report by Mordor Intelligence, the global engineering services industry has remained resilient over the years, with a market size worth $1.67 trillion as of 2024. It is expected to grow to $2.04 trillion by 2029 at a compound annual growth rate (CAGR) of 4.20% between 2024 and 2029. Although the largest market for the engineering services industry is centered in the Asia Pacific region, the Middle East and Africa are showing the fastest market growth globally.
This growth is attributed to various factors, including infrastructure development, technological advancements, demand for sustainable solutions, and the need for specialized skills in infrastructure programs. Since infrastructure projects are complicated and strenuous, the demand for innovative engineering services continues to grow. In fact, data from the US Census Bureau shows that the value of infrastructure building in the US rose from $1.80 trillion to $1.84 trillion between October 2022 and February 2023. The surge in the use of digital technologies such as artificial intelligence, cloud computing, and IoT is another primary force driving the market.
Thus, the engineering sector stands out as a promising investment opportunity due to technological advancements, resilience to economic fluctuations, supportive government initiatives, and strong market demand.
The construction industry experienced a 10% increase in nominal value added and a 12% growth in gross output in 2024. According to Deloitte, construction spending surpassed $2 trillion in the US in 2024. Its employment level touched 8.3 million in July 2024, exceeding its previous high of 7.7 million in 2006. These numbers have been consistently increasing for more than a year. Similarly, the Dodge Momentum Index (DMI), which measures nonresidential building spending, was on an upward trajectory in fiscal Q2 2024. This reflects increasing confidence in market conditions among developers and owners.
Deloitte’s 2025 Engineering and Construction Industry Outlook states that there are reasons to be optimistic in 2025. The company’s analysis of the Oxford Economic Model shows that short-term interest rates are likely to fall gradually over the coming years, followed by interest rate cuts by the Federal Reserve. The improving financial and economic conditions are anticipated to positively influence construction and engineering demand across various segments.
Declining mortgage rates may also increase demand and residential construction activity. Other drivers of growth in segments such as manufacturing, engineering, and energy may include government investments through the Infrastructure Investment and Jobs Act (IIJA), the Creating Helpful Incentives to Produce Semiconductors (CHIPS) and Science Act, and the Inflation Reduction Act (IRA).
With these trends in view, let’s look at the 10 best engineering stocks to buy for 2025.
10 Best Engineering Stocks to Buy for 2025
Our Methodology
We sifted through ETFs, online rankings, and internet lists to compile a list of 30 engineering stocks. We then selected the 10 stocks that were the most popular among elite hedge funds. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them as of Q3 2024. The hedge fund data was sourced from Insider Monkey’s database which tracks the moves of over 900 elite money managers.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
10 Best Engineering Stocks to Buy for 2025
10. Arcosa, Inc. (NYSE:ACA)
Number of Hedge Fund Holders: 25
Arcosa, Inc. (NYSE:ACA) provides infrastructure-related solutions and products and operates in the Engineered Structures, Construction Products, and Transportation Products segments. Its Engineered Structures segment manufactures and sells specialized steel structures for infrastructure businesses, including structural wind towers, traffic structures, utility structures for electricity transmission and distribution, and telecommunication structures.
The company reported a strong fiscal Q3 2024, with its adjusted EBITDA growing significantly faster than its top line, at 39%. It generated a free cash flow of $107 million, attributed to the company prioritizing working capital management. Its consolidated revenues for fiscal Q3 2024 also increased 14%. This growth was driven by the organic improvements in the company led by engineering structures and construction products, along with accretive acquisitions completed earlier in 2024, including Ameron.
Arcosa, Inc. (NYSE:ACA) also made significant progress in its strategic transformation and completed the divestiture of its steel components business in fiscal Q3 2024. On October 1, the company announced the acquisition of Stavola, marking the largest purchase in Arcosa, Inc.’s (NYSE:ACA) history. The acquisition will allow the company to expand its aggregates footprint with elevated exposure to lower-volatility infrastructure markets. The company ranks tenth on our list of the 10 best engineering stocks to buy for 2025.
9. Granite Construction Incorporated (NYSE:GVA)
Number of Hedge Fund Holders: 29
Granite Construction Incorporated (NYSE:GVA) is a diversified construction and construction materials company. Its segments focus on rehabilitating and constructing bridges, airports, roads, dams, reservoirs, marine ports, rail lines, aqueducts, and other infrastructure and site development projects for use by the general public. It also provides construction of complex projects such as mining, solar, battery storage, and other power-related projects. Its Materials segment produces asphalt concrete, liquid asphalt, and recycled materials for internal use in its projects and for sale to third parties.
Public funding supports around 75% of the company’s construction revenue. However, it also undertakes a variety of private work and holds the potential to grow in these markets. It is on the path to near-term growth in alignment with macroeconomic trends in energy, technology, and the transportation of goods. Granite Construction Incorporated’s (NYSE:GVA) recently announced organizational realignment better positions it for growth in this sector.
Its construction segment revenue reached $1.1 billion in fiscal Q3 2024, growing by 14% year-over-year and marking a record high for the third quarter. This growth was attributed to the company’s operations across geographies, even when some of its profitable projects were delayed as owners pushed work into 2025.
Due to its strong public and private outlook, the company expects continued organic revenue growth at a compound annual growth rate (CAGR) of 6% to 8% through 2027. It plans to continue strengthening and expanding its Mergers & Acquisition strategy with geographical expansion and bolt-on acquisitions. Following a similar strategy in 2024, Granite Construction Incorporated (NYSE:GVA) expanded in the southeast through the acquisitions of Lehman-Roberts, Memphis Stone & Gravel, and Dickerson & Bowen, businesses that serve as a platform for further growth for the company.
8. Dycom Industries, Inc. (NYSE:DY)
Number of Hedge Fund Holders: 29
Dycom Industries, Inc. (NYSE:DY) provides specialty contracting services. It offers an array of services to telecommunication providers, including engineering and design, program management, and others. Its engineering services span the planning and design of underground, aerial, and buried fiber optic, copper, and coaxial cable systems that extend from the telephone company’s hub location to a business or home.
The company’s revenue increased 12% year-over-year to $1.272 billion in fiscal Q3 2025, and its organic revenue increased by 7.6%. This growth was attributed to the deployment of gigabit wireline networks, wireless networks, and wireline converged networks. The company is also seeing continued strategic transactions, including commitments and refinancings, to increase many of its customers’ capital expenditures.
Dycom Industries, Inc. (NYSE:DY) completed the acquisition of Black & Veatch’s public carrier wireless telecommunications infrastructure business during fiscal Q3 2025. It is also focusing on opportunities related to AI, including expansive new national deployments of high capacity, low latency inter and intracity networks. The company ranks eighth on our list of the 10 best engineering stocks to buy for 2025.
Aristotle Small Cap Equity Strategy stated the following regarding Dycom Industries, Inc. (NYSE:DY) in its Q2 2024 investor letter:
“Dycom Industries, Inc. (NYSE:DY), a provider of engineering and construction services to the telecommunications and cable television industries, benefitted from continued growth in its core business, funding tailwinds, and expanding margins as demand for wireline services continues to grow. We maintain a position as we believe the company remains well positioned for longer-term growth alongside secular trends for expanding fiber deployments to support faster broadband connectivity speeds and opportunities to deploy fiber to rural or underserved areas across the country.”
7. Comfort Systems USA, Inc. (NYSE:FIX)
Number of Hedge Fund Holders: 35
Comfort Systems USA, Inc. (NYSE:FIX) provides electrical and mechanical contracting services. It also offers engineering, design-assist, turnkey, and direct-hire construction services of modular systems for the industrial, power, and advanced technology sectors.
The company’s operating income in fiscal Q3 2024 was 50% higher than its already strong fiscal Q3 last year. Revenue for fiscal Q3 2024 was $1.8 billion, an increase of $343 million or 32% compared to last year. In addition, the company’s same-store backlog was 21% higher than last year, supported by exceptional strength in its pipelines.
Comfort Systems USA, Inc. (NYSE:FIX) experienced a 39% revenue increase in its Mechanical segment. This growth was attributed to modular expansion, recent expansions, and substantial organic construction and service growth. Its Electrical segment also grew 8% in revenue, with overall same-store revenue increasing by 18% or $241 million. The remaining $193 million increase came from the company’s acquisitions.
Construction accounted for 84% of the company’s revenue, with projects for existing building construction representing 27% and new buildings 57%. This reflects its strong operational model. Comfort Systems USA, Inc. (NYSE:FIX) also increased the pace of its share repurchases in fiscal Q3 2024, and returned $42 million to shareholders in 2024 by retiring more than 130,000 shares.
Carillon Chartwell Small Cap Growth Fund stated the following regarding Comfort Systems USA, Inc. (NYSE:FIX) in its first quarter 2024 investor letter:
“Another strong performer was Comfort Systems USA, Inc. (NYSE:FIX). The company is a modular construction company, involved in manufacturing plant and data center construction. Given strong demand trends, the company is reporting record growth and backlogs.”
6. Primoris Services Corp. (NYSE:PRIM)
Number of Hedge Fund Holders: 38
Primoris Services Corporation (NYSE:PRIM) provides a range of engineering, construction, maintenance, fabrication, and replacement services to a diverse customer base. Its segments operate throughout Canada and the United States and specialize in various services, including engineering, construction, procurement, soil stabilization, highway and bridge construction, flood control, pipeline construction, and more.
Revenue for the company’s fiscal Q3 2024 was over $1.6 billion, an increase of $119.6 million or 7.8% over the prior year. This growth was driven primarily by its Energy and Utilities segments. The company’s record cash flow from operations in the quarter drove it to more than $200 million for the first nine months of the year, higher than its full-year fiscal 2023 cash flow from operations. This reflects the company’s positive trajectory in terms of cash flow, pushing it towards its near-term objectives.
The market for Primoris Services Corporation’s (NYSE:PRIM) EPC services and product solutions is continually seeing high demand. However, its industrial services revenue was lower. This was due to decreased activity in its Canadian operations and non-union industrial businesses, where it is divesting or winding down certain low-margin or subscale businesses. The company’s margins did improve due to strong execution on natural gas projects in the Western United States, along with improved bid margins for its work booked over the last 12-18 months. It ranks sixth on our list of the best engineering stocks to buy for 2025.
5. Tetra Tech, Inc. (NASDAQ:TTEK)
Number of Hedge Fund Holders: 39
Tetra Tech, Inc. (NASDAQ:TTEK) is a global engineering and consulting service provider focusing on environment, water, and sustainable infrastructure. It operates through the Government Services Group (GSG) and Commercial/International Services Group (CIG) segments. The company provides engineering and consulting services to US commercial clients and international clients through the CIG segment. In addition, it provides engineering and consulting services primarily to US government clients and international development agencies across the globe through the GSG segment.
The company’s revenue increased by 15% to $4.32 billion for the fiscal year 2024. In addition, its annual operating income exceeded $0.5 billion for fiscal 2024 for the first time in its history. This reflects its record performance throughout the year, and in fiscal Q4 2024. Revenue for fiscal Q4 2024 increased by 9% from last year to $1.37 billion. This 9% increase came atop a very strong quarter performance in fiscal Q4 2023.
Tetra Tech, Inc.’s (NASDAQ:TTEK) work with US Federal clients is increasing and was up 16% in fiscal Q4 2024 compared to last year. Excluding the contributions of Ukraine, the company’s margins with the US Federal government increased by around 13%, supported by increases in its civilian and defense environmental and infrastructure programs. In addition, Tetra Tech, Inc. (NASDAQ:TTEK) grew its state and local revenue by 9%, driven by its operations in advanced water treatment and water system modernization for cities and municipalities across the US. These trends position the company as one of the best engineering stocks to buy for 2025.
Polen Global SMID Company Growth stated the following regarding Tetra Tech, Inc. (NASDAQ:TTEK) in its Q3 2024 investor letter:
“We initiated a new position in Tetra Tech, Inc. (NASDAQ:TTEK), an environmental consulting business we’ve followed in our library for several years. Tetra Tech is focused on water and water infrastructure-related consulting and is a significant player in environmental, renewable energy, sustainable infrastructure, and international development. The company has a long history of consistent growth and solid returns on capital. About 30% of the revenue comes from long-term projects from the federal government, another 11% from state and local, and a portion from disaster response and international aid. This provides some ballast to the company’s demand, also driven by commercial projects. Between significant infrastructure spending, the potential for widespread PFAS cleanup PFAS (per-and poly-fluoroalkyl substances are a large group of man-made chemicals used in various industrial and consumer products since the 1950s), water scarcity, and changing environmental conditions, we believe the demand backdrop for Tetra Tech is improving, creating an attractive investment opportunity”.
4. Fluor Corporation (NYSE:FLR)
Number of Hedge Fund Holders: 39
Fluor Corporation (NYSE:FLR) is a holding company that provides engineering, procurement, construction (EPC), project management, and other services through the Mission Solutions, Urban Solutions, and Energy Solutions segments. Revenue for the company’s fiscal Q3 2024 was $4.1 billion.
It started the next phase of engineering and design work for RoPower’s small modular nuclear reactor project in Romania, employing NuScale’s industry-leading technology. In addition to this work, the company is making substantial progress in securing a reimbursable front-end award for two conventional nuclear reactors in Romania.
Fluor Corporation’s (NYSE:FLR) strategic priorities are focused on driving growth across its portfolio. Its revenues from non-traditional oil and gas projects stood at 75% at the end of fiscal Q3 2024, exceeding its strategic target of 70%. The company is also seeing strong compound annual growth rates for revenue and EBITDA in its next strategic planning period through 2028. The company plans to support this growth through improved long-term TSR delivery and solid cash generation. Fluor Corporation (NYSE:FLR) ranks fourth on our list of the best engineering stocks to buy for 2025.
3. MasTec Inc. (NYSE:MTZ)
Number of Hedge Fund Holders: 44
MasTec, Inc., (NYSE:MTZ) is an infrastructure construction company that operates through Oil and Gas, Clean Energy and Infrastructure, Power Delivery, and other segments. These segments provide engineering, construction, maintenance, and other services related to communications infrastructure, energy and utilities, and other industries.
The company reported a revenue of $3.3 billion in fiscal Q3 2024. It also improved its quarterly balance sheet, with cash flow from operations reaching around $280 million despite a 10% sequential revenue growth. Its Clean Energy and Infrastructure segments reported record levels of both revenue and EBITDA, up over 20% and 80% sequentially, respectively. While 2023 was a challenging year for this segment, MasTec, Inc. (NYSE:MTZ) made several changes to improve its operational performance and maximize its competitive positioning.
MasTec, Inc. (NYSE:MTZ) will be reporting FQ4 2024 results on February 26, 2025. Analysts polled by SeekingAlpha are expecting 84 cents per share in earnings on revenue of $3.32 billion for the quarter. The company takes the third spot on our list of the 10 best engineering stocks to buy for 2025.
2. KBR Inc. (NYSE:KBR)
Number of Hedge Fund Holders: 53
KBR, Inc. (NYSE:KBR) delivers engineering, science, and technology solutions to companies and governments worldwide. Its Government Solutions segment provides solutions to intelligence, defense, aviation, space, and other missions for military and other government agencies, primarily in the US, UK, and Australia. In addition, its Sustainable Technology Solutions segment operates a portfolio of over 80 sustainability-focused process technologies.
KBR Inc. (NYSE:KBR) is running on a strong profitability model. Its fiscal Q3 2024 reported double-digital year-over-year growth across all its key metrics, with group revenue up 10% year-over-year. The company closed on its LinQuest acquisition and is carrying out the integration process. LinQuest has performed profitably since closing, winning over $60 million of new work and delivering solid results.
On December 16, the company announced that it had been awarded around $445 million cost-plus-fixed-fee contract under the Department of Defense Information Analysis Center’s (DoD IAC) multiple-award contract (MAC) vehicle. Awarded by the US Air Force’s 774th Enterprise Sourcing Squadron, the DoD IAC MAC task orders aim to develop and create new knowledge to enhance the DTIC repository and the R&D and S&T community. The work is expected to be performed across various DoD locations over five years.
Cove Street Capital Small Cap Value Fund stated the following regarding KBR, Inc. (NYSE:KBR) in its Q2 2024 investor letter:
“On the plus side, KBR, Inc. (NYSE:KBR) has been a strong performer so far YTD on the back of an investor day in the second quarter that highlighted the success of the last four-year plan (2020-2023) before laying out ambitious but credible targets for the next 4 years (2024- 2027). Since 2020, KBR has pivoted its commercial business away from high-risk EPC projects to a more differentiated IP-first consulting approach that now sees 20% EBIT margins and contributes 40% of its overall profitability. KBR has cleaned up its balance sheet by settling convertible notes and warrants and now sits at a healthy 2x net leverage. With the upcoming ramp of a $20B government services contract with the US army, the company is well positioned to generate cash and return value to shareholders.”
1. Quanta Services, Inc. (NYSE:PWR)
Number of Hedge Fund Holders: 58
Quanta Services, Inc. (NYSE:PWR) is a contracting services company that delivers infrastructure solutions for communications, utilities, pipelines, renewable energy, and other industries. Its Renewable Energy segment includes engineering, repowering, repair, and new construction services.
The company reported fiscal Q3 2024 revenue of $6.5 billion. It also generated a healthy cash flow in the quarter, with cash flow from operations at $739.9 million and free cash flow of $539.5 million. Quanta Services, Inc. (NYSE:PWR) is seeing positive momentum across its portfolio of solutions with increased demand for and tightening of power generation capacity and the significant power grid upgrades and enhancements required to facilitate load growth.
During fiscal Q3 2024, the company recapitalized the business after its acquisition of Cupertino. This initiative, along with earnings and cash flow performance, provided it with a strong balance sheet and ample liquidity to support its organic growth expectations and the opportunistic investment of capital to generate incremental returns for its stockholders.
Quanta Services, Inc., (NYSE:PWR) holds a competitive advantage due to its portfolio approach and focus on craft-skill labor, which allows it to manage risks and shift resources across geographies and service lines.
Overall, PWR ranks first among the 10 best engineering stocks to buy for 2025. While we acknowledge the potential of engineering stocks, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than PWR but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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