1. Quanta Services Inc (NYSE:PWR)
Number of Hedge Fund Investors: 56
Quanta Services Inc (NYSE:PWR) supplies skilled labor to power companies, on behalf of clients. It’s one of the best under-the-radar AI stocks to buy in 2024 since its services will be in demand as companies’ appetite for AI talent grows. Quanta Services Inc (NYSE:PWR) also provides infrastructure services for electric power, pipeline, industrial and communications industries.
Quanta Services Inc (NYSE:PWR) CEO Duke Austin talked about AI, data centers and much more during its latest earnings call:
“We’ve spent tons of R&D here. We’d like to conductor. We certainly have installed plenty of the other high-density conductor and we like it. So I think in general, yes, it makes sense. Technology will be a piece of this.
It will — and I — when you look at mining machines and you look at everything we see from a power demand, AI is a piece of it. But the onshoring, the shifts, the Amazon centers that are fully electric, you can imagine all the things that are drawing load right now. And it’s in my mind, we talked about data centers, I don’t know, four years ago, and said it would be a big push. We had no idea that AI would come in as well. And I just think as you move forward, if you haven’t used auto power or ChatGPT that ain’t going anywhere. That’s fantastic. I love it. It’s great. I think the country is in that direction and it’s certainly demand there and the jets and everything else we do on any given day, even if you reduce power. It’s kind of like appliances.”
Read the entire earnings call transcript here.
A Wall Street Journal report recently mentioned that Joseph Ghio, an analyst at Williams Jones Wealth Management, who is highly bullish on stocks that are indirect beneficiaries of AI, owns a stake in Quanta Services Inc (NYSE:PWR).
Artisan Mid Cap Fund stated the following regarding Quanta Services, Inc. (NYSE:PWR) in its fourth quarter 2023 investor letter:
“Along with DexCom, notable adds in the quarter included Quanta Services, Inc. (NYSE:PWR) and Jabil. Quanta provides outsourced skilled labor for maintenance and construction services, primarily to utilities. We have followed the company for over a decade and have witnessed its shift from oil and gas to renewables. The energy transition (solar and wind farms, electric vehicles, etc.) requires investments in the US energy grid to support greater electrification. At the same time, climate change is increasing stress on the existing grid, forcing utilities to increase maintenance spending. Furthermore, Federal incentive programs, such as the Inflation Reduction Act and Bipartisan Infrastructure Act, will help fuel Quanta’s long-term growth given its expertise in transmission and distribution connections as renewable energy infrastructure seeks to connect to the grid. The stock sold off early in the quarter on concerns that higher interest rates would lead to a pullback in renewables investments by utility customers. However, based on our industry research, we think Quanta’s key customers are well resourced and committed to meeting long-term electrification needs via infrastructure investment. We used the selloff as an opportunity to move the position into the CropSM at a more attractive valuation.”
If you are looking for an AI stock that is as promising as Microsoft but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
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