Chad Dillard of Bernstein said in a recent program on CNBC that Quanta Services (NYSE:PWR) is an "800-pound gorilla" in high-voltage transmission lines. He was responding to a CNBC host who asked him to discuss "AI plays in disguise" beyond the major names everyone is aware of.

"I think we need to focus on what the bottlenecks are, right? It's power and labor," Dillard said. "On the power side, like you just said, you know, Caterpillar, it's an obvious one, power generation. But there's also another way to improve power, and that's by raising the voltage. And I'm talking about high voltage transmission lines. I'm talking about raising the voltage in data centers. ( Quanta Services) They're an 800-lb gorilla basically in the room."

Quanta Services (NYSE:PWR) can benefit from the coming wave of AI-related power demand because it's one of the few companies big enough to do the actual building when utilities spend money to expand and upgrade the grid. Quanta makes money by constructing the power lines, substations, and grid infrastructure the US needs, work that puts it right in the middle of the buildout.

In the recent quarter, revenue jumped about 40% year over year, and the company raised its full-year guidance for revenue, earnings per share, and cash flow.

Bulls also point to Quanta's recent acquisitions: Phalcon, Enerfab, Percheron, and PSD. Quanta expects these deals to add roughly 3 to 4% to its revenue in 2026. The bull case is that these purchases add skilled workers, fabrication capacity, and permitting support, giving Quanta more control over the bottlenecks that slow projects down.

The acquisitions will directly benefit the company in the long run. Phalcon brings about 4,100 workers and over 400,000 square feet of fabrication and modular facilities across the Northeast and Mid-Atlantic. Enerfab adds roughly 2,100 workers and 250,000 square feet of fabrication space, covering electrical, mechanical, and maintenance work. Percheron handles the front-end stuff that trips up big projects: land title, right-of-way, surveying, and engineering design. PSD adds engineering, manufacturing, and prebuilt substation buildings in Australia.

Valuation isn't cheap. Quanta trades at a forward price-to-earnings ratio of about 41.6, roughly double its sector median of 20.8. Its forward EV/EBITDA sits around 26.8 versus a sector median of 12.5, more than double. If the selloff in AI and power stocks deepens, or investors pull money out of anything tied to data center spending, Quanta's multiple could shrink.

While we acknowledge the risk and potential of PWR as an investment, our conviction lies in the belief that some 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 and that has 10,000% upside potential, check out our report about the cheapest AI stock.

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