Data center construction

When China-based DeepSeek gained mainstream attention with its low-cost artificial intelligence model earlier this year, some wondered if demand for data center power had been overhyped.

DeepSeek, which develops large language models similar to OpenAI’s ChatGPT, claims that its highly efficient AI technology can effectively reduce computing costs and overall power needs, casting doubt on how much energy infrastructure data centers of the future might require.

But John Medina, senior vice president at Moody’s Ratings, thinks these advancements could fuel more growth, not less.

“What that does is it lowers the cost of computing and potentially increases the number of new companies and new applications that can be created,” said Medina. “It actually could lead to more usage than less usage.”

Mitchell Osborne, director of MEP at Adolfson & Peterson Construction, a Minneapolis-based general contractor, echoed that sentiment.

“While more efficient AI models will reduce the amount of power consumed, we are still in AI and quantum computing’s infancy,” said Osborne. “I do not foresee data centers or power infrastructure construction slowing down.”

Power construction is surging alongside data center projects as contractors rush to keep up with soaring demand, according to industry sources. Tech giants such as Amazon, Microsoft and Meta are rapidly expanding their data center footprints. Meanwhile, a joint venture among OpenAI, Softbank and Oracle will invest $100 billion in artificial intelligence infrastructure, with the potential to scale up to $500 billion, according to a White House press conference.

That shift is fueling a surge in power construction, said Ryan Wobbrock, vice president at Moody’s Ratings. He said utilities and power producers are rapidly increasing expenditures to meet the energy needs of data centers.

“We’re certainly keeping track of that, and we’re seeing the fruits of it really come through in companies’ announcements,” said Wobbrock. “Every time a company has a public statement, it seems to increase its capital budget, and a lot of that is tied to the data center growth.”

New starts and renovations

The surge in new power construction is also driving local grid work as well, said Osborne.

“I absolutely see data center and power project trends continuing,” said Osborne. “In the local market, substations are being specifically built for data centers and stability upgrades are being subsidized by these companies for existing grids.”

Older power plants, once slated for retirement, are being enhanced rather than decommissioned, said Michael Byrne, vice president at Linesight, a Dublin-based construction consultancy firm. That’s largely because new power projects still can’t keep up with the pace of data center expansion in key regions.

From 2014 to 2016, data center energy use reached about 60 terawatt-hours. By 2018, the figure jumped to about 76 terawatt-hours. In 2023, data center energy use hit 176 terawatt-hours, about 4.4% of total U.S. electricity consumption. That will jump to between 325 and 580 terawatt-hours by 2028, according to the Energy Department.

The U.S. power grid was not designed to handle this level of demand growth, said Theodore Paradise, chief policy and grid strategy officer at CTC Global, an Irvine, California-based advanced conductor manufacturer for overhead transmission powerlines.

“The transmission system is the critical enabler of all this. It is the existential piece to whether you can add additional supply,” said Paradise. “Interconnection costs [are] getting bigger. Those might have been $20 million or $40 million for substation work. Now, we’re seeing interconnection costs that can be hundreds of millions of dollars or even over a billion dollars in some cases.”

Yet, that isn’t slowing the pace of data center construction. Some developers are even proceeding without fully secured power contracts, said Byrne. Osborne said that depends on what specific phase of construction the data center or campus is in.

“If it is a single building or an expansion of an older facility, we see a gap in power availability due to permitting and general substation design,” said Osborne. “Hyperscalers and colocation campuses are usually pretty good at pre-planning during the real estate procurement phase and coordinating with local utility providers on the amount of power they need and when to start these projects.”

Tech giants, on the other hand, are putting matters in their own hands. These deep-pocketed companies are increasingly building their own power construction projects, said Medina.

“The new trend is to build a new data center, very large, and to build a power plant right next to it. Build them together,” said Medina. “The hyperscaler will pay for both. They build a gas plant, some solar and some batteries and a big data center, all together. It’s kind of like an island.”

Headwinds on power construction

Skilled labor, a persistent headwind for the construction industry, continues to be a drag on construction activity, said Osborne.

“Due to the ever-increasing amount of data center construction starts, the number of experienced teams that have completed successful projects will become competition in itself,” said Osborne. “Not only are contractors competing for work with developers and clients, but we are now competing for the people to build the number of projects being started. This creates an issue for developers and contractors alike.”

Some sustainability goals could also slow the pace of construction activity, said Byron Sarhangian, partner at Snell & Wilmer, a Phoenix-based law firm. He warned that strict environmental requirements could burden U.S. progress in AI development, especially in relation to other nations.

“When a company says it needs a gigawatt of energy and it’s got to be green, all of a sudden it’s like, ‘Listen, not sure you can get a gigawatt of energy in the first place,’” said Sarhangian. “Frankly, we’re in a race with a number of countries, including China, as it relates to quantum computing and AI. It’s almost like being in the space race and saying, ‘We’re going to go all green.’ Not the time. We need absolutely every piece of energy infrastructure that we can have.”

Looking ahead

The urgency to address these challenges has reached the federal level. The Trump administration recently issued an executive order declaring an energy emergency, aiming to fast-track new power generation and transmission construction.

“That is no small thing, that is a significant executive order,” said Paradise. “What the administration is doing in issuing that is saying, ‘What is happening now is not meeting our energy needs, this is not working.’”

Interest in nuclear energy as a potential solution is growing too, particularly among hyperscalers with aggressive goals. Microsoft, for instance, is experimenting with nuclear energy sources for data centers, but large-scale development remains years away.

“This is still some time before we see a rollout of small modular reactors on data center campuses,” said Byrne. “Nuclear energy will predominantly be used for large-scale campuses, 1 gigawatt or more. And these projects are now only beginning.”

State and federal regulators may also start weighing in on construction expansion, said Osborne.

“As power consumption increases, we may see changes in state and federal regulations to prohibit or encourage data center expansion and usage as well as AI usage,” said Osborne. “This could impact how quickly data centers and infrastructure construction can be started.”

What started as a relatively niche sector a few years ago has transformed into a powerhouse of construction activity, with no signs of a slowdown this year.

Data centers continue to drive significant growth in nonresidential construction planning, said Sarah Martin, associated director of forecasting at Dodge Construction Network. These projects contributed to a 19% increase in planning activity since December 2023, compared to just 5% growth without their inclusion, according to Dodge.

That momentum shows no signs of fading.

J.P. Morgan estimates spending on data centers could add between 10 to 20 basis points to U.S. economic growth in 2025 and 2026, according to Reuters. Big tech companies are a major reason for the surge, doubling down on data center investments in order to meet growing artificial intelligence demand.

For example, President Donald Trump recently announced Stargate, a joint venture between OpenAI, Softbank and Oracle. The JV plans to invest $100 billion in artificial intelligence infrastructure, with the potential to scale up to $500 billion by 2028. Each data center facility will span about 500,000 square feet, according to Stargate.

Here are some other major data center projects that top tech giants plan to build in 2025:

Amazon

Amazon is going big on data centers, with plans to invest $150 billion in the coming 15 years on its infrastructure to handle the expected demand for artificial intelligence and other cloud computing needs, Bloomberg reported. 

The tech giant first started opening data centers in central Ohio in 2016, and recently announced a $10 billion plan to further expand its cloud computing infrastructure in the state, per a December news release from Ohio Gov. Mike DeWine. The new investment follows a $7.8 billion plan announced in 2023, including work in New Albany, Ohio.

Those planned projects include a new $2 billion data center campus in Sunbury, Ohio. Amazon’s facility will occupy about 200 acres in an industrial park in the city, according to WBNS10. Construction of the first 450,000-square-foot building is expected to begin in January 2028 and be complete by December 2034, Data Center Dynamics reported.

Google

The Mountain View, California-based multinational corporation plans to continue its aggressive expansion into data center construction, with a number of high-profile projects slated for 2025, according to Devon Smiley, communications manager of technical infrastructure at Google.

For example, Google broke ground in July 2023 on its first data center in Arizona. The site will span 750,000 square feet, with the first phase due in July, according to Data Center Dynamics.

Plans feature a $600 million facility to support some of the firm’s signature services, such as Gmail and Google Cloud. The Mesa project will tie into the establishment of a new Phoenix cloud region, expanding Google’s digital infrastructure footprint in the area. No general contractor has been confirmed yet, said Smiley.

In the Midwest, Google broke ground in April 2024 on a $2 billion data center in Fort Wayne, Indiana. The facility will power its global AI and cloud infrastructure, according to the company. The Indiana Economic Development Corp. will give Google a 35-year data center sales tax exemption for the first $800 million invested, with options to extend up to 50 years. Atlanta-based Holder Construction is the general contractor on the project, according to local outlet 21Alive.

Meanwhile, in Nebraska, the tech giant’s newest date center project in Lincoln is under construction on roughly 580 acres, according to the Nebraska Examiner. That project complements a separate $750 million facility under construction in Omaha, according to a government release. Once complete, Google will have four data center campuses in the state, according to the company. Google did not disclose the projects’ general contractors.

Meta

Meta, the parent company of Facebook and Instagram, has big plans for data center construction. On Jan. 24, CEO Mark Zuckerburg called 2025 “a defining year for AI” in a Facebook post, and claimed the company would construct a data center large enough to “cover a significant part of Manhattan.” Zuckerburg said Meta will bring on about 1 gigawatt of computing power in 2025, and plans to invest heavily in growing the firm’s AI teams.  

That ambtious goal aligns with previously shared plans. In 2024, the firm announced new data center campuses in:

• Jeffersonville, Indiana, awarded to Turner Construction.
• Rosemont, Minnesota, awarded to Mortenson, according to Finance and Commerce.
• Montgomery, Alabama, awarded to Hensel Phelps. 
• Cheyenne Wyoming, awarded to Portland, Oregon-based Fortis Construction. 
• Aiken, South Carolina (no contractor announced). 

Each of those campuses represents an $800 million investment in the region, Meta claims.

In December, the Menlo Park, California-based tech giant announced a larger investment near Monroe, Louisiana. The custom-designed 4 million-square-foot campus will be Meta’s largest to date, the company said. When finished, the data center will represent over $10 billion in investment and the company anticipates over 5,000 construction workers will be on site at peak construction. 

The social media giant has tapped New York City-based Turner, Redwood City, California-based DPR and Minneapolis-based Mortenson to build the multibillion-dollar project. No completion date has been announced.

Microsoft

One of the largest and most recognizable tech companies in the world has been busy on the data center front. Redmond, Washington-based Microsoft has announced plans to pump more than $80 billion into cloud data centers, with half of that money going to facilities in the U.S.

“AI promises to drive innovation and boost productivity in every sector of the economy,” said Brad Smith, vice chair and president of Microsoft, in a Jan. 3 company blog post. “The United States is poised to stand at the forefront of this new technology wave, especially if it doubles down on its strengths and effectively partners internationally.”

The firm, which is also one of the largest investors in ChatGPT parent company OpenAI — with nearly $14 billion pumped into the company so far, according to CNBC — has jump-started its plans. It’s building a $3.3 billion data center on the site of the former Foxconn site in Mount Pleasant, Wisconsin, which it tapped Chicago-based Walsh Construction to lead. 

It’s also planning to invest $1 billion on three data centers in Licking County, Ohio, according to Data Center Dynamics. Burnsville, Minnesota-based Ames Construction will build one of the three data centers, a $420 million project in New Albany, the tech firm said in a construction update blog. Two other data centers worth $1 billion in West Des Moines, Iowa, and La Porte, Indiana, are also in the works.

Oracle

While Oracle CEO Larry Ellison made news with the White House announcement unveiling the Stargate initiative on Jan. 21, he had ramped up his commitment to building massive, power-hungry data centers long before that.

The co-founder and chief technology officer of Austin, Texas-based tech giant Oracle told attendees of Oracle Cloud World 2024 in September that the firm now has 160 public and private data centers, according to Data Center Frontier. 

Additionally, he told analysts the company was working on a data center requiring more than a gigawatt of electricity that would be powered by three small nuclear reactors, according to CNBC. While he didn’t reveal the exact location of the facility, he said it was in a region where permits had already been approved to build the reactors as a power source.

Those announcements followed the tech firm’s pledge from last year to spend $10 billion on data center expansion in 2025. At the time, Ellison told investors that an AI-focused data center the firm is building in Salt Lake City is so large, eight Boeing 747s would fit nose-to-tail inside it. 

“We’re bringing on enormous amounts of capacity over the next 24 months,” Ellison said.

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By ConstructEdge

The project is set in motion. Owners, general contractors, and subcontractors are onboarded onto the construction management platform. Drones and autonomous vehicles are deployed. Everything appears to be running smoothly, until crews step into the field.

Suddenly, progress grinds to a halt. The connectivity available at the trailer doesn’t extend to the jobsite. The cell network, overloaded with users and obstructed by concrete walls, slows to a crawl. Miscommunication escalates. Subcontractors clash as utilities are installed out of sequence, leading to costly rework.

The reality is simple: construction technology is only as effective as the network supporting it. Nowhere is this more evident than in data center construction, where heavy user congestion, dense concrete structures, and sprawling sites make reliable connectivity a challenge. Unlike other projects, data center builds require precise coordination among specialized trades, and delays from poor connectivity ripple through the project, leading to missed deadlines and costly overruns.

Data centers are the backbone of the digital-age, and their construction must reflect the same emphasis on resilient, high-performance network infrastructure that they are designed to provide. Without a robust network, the advanced technology used in these builds cannot function as intended, leading to inefficiencies and costly delays.

The high-stakes reality of poor connectivity

Nowhere is the impact of poor connectivity more evident than on a data center build, where thousands of workers, multiple trades, and an array of technology-dependent workflows converge. These projects operate at a breakneck pace, with aggressive timelines and intricate coordination requirements. Every delay, missing documentation, miscommunication, or stalled equipment comes with a price tag.

The cost of poor connectivity is often hidden in lost productivity. Take, for example, a worker who leaves the jobsite three times a day to return to the trailer to access the network for updates. Earning $100 per hour, a 20-minute round-trip equals a full hour of wasted time daily, an additional $100 per worker per day in lost productivity. Now, scale that across a project with hundreds or even thousands of workers, and the financial impact quickly becomes staggering.

Beyond lost productivity, poor connectivity creates additional risks:

• Data-Intensive Operations: Data center builds use BIM modeling, laser scanning, and autonomous equipment, all of which require real-time data exchange. Poor connectivity means critical updates don’t sync, leading to outdated schematics or machine errors.
• Emergency Response and Worker Safety: In large-scale builds, real-time communication is critical for emergency response. A network failure can delay a worker’s call for help, slowing response time and increasing the severity of injuries.
• High-Density Workforce and Equipment: Data center construction requires large teams of specialized trades working simultaneously in tightly coordinated phases. A single connectivity failure can disrupt this coordination.
• Security and Compliance Risks: These projects involve sensitive data, making secure, real-time access control essential. Without it, biometric access controls, IoT surveillance systems, and cyber-secure data transmissions are at risk.

The industry has made significant advancements in construction site safety, wearables, real-time monitoring, and AI-driven hazard detection, but without a strong network, these innovations become ineffective. In high-risk environments, safety depends on connectivity.

Rethinking the role of connectivity

The solution isn’t just about adding more access points or relying on mobile hotspots, it’s about treating connectivity as a critical component of project planning. Just as teams map out power distribution, logistics, and safety protocols, they must also develop a networking strategy that ensures consistent, high-speed access across the site.

This means implementing:

• Pre-Construction Assessments – Understanding where dead zones currently exist or will emerge as structures rise and planning infrastructure accordingly.
• Scalable Solutions – Networks that evolve with the project, maintaining coverage as the site expands and areas are turned over to owners.
• Redundant Systems – Backup solutions that maintain operations even if primary networks fail.

A connectivity-first approach to data center construction

A shift in mindset is required: Connectivity must be treated as a foundational component of construction, not just an add-on. Now that investments have been made into automation, AI, and project management tools, it’s time to invest in the infrastructure that makes them work. Without it, even the most advanced technology becomes useless.

ConstructEdge specializes in delivering connectivity solutions designed to keep data center projects running smoothly. From pre-construction assessments to scalable networks, we ensure your teams, technology, and workflows stay connected, no matter how complex the build.

Discover how to overcome connectivity challenges in the full guide: Building the Future: A Guide to Navigating Complex Connectivity Challenges in Data Center Construction.

Dive Brief:

• A joint venture among OpenAI, Softbank and Oracle plans to invest $100 billion in artificial intelligence infrastructure, with the potential to scale up to $500 billion by the end of President Donald Trump’s second term in office, according to a White House press conference.
• Stargate, the newly announced initiative, includes 10 data centers, including one already under construction in Abilene, Texas, said Larry Ellison, Oracle chairman and chief technology officer, during the Tuesday event at the White House. Each facility will span about 500,000 square feet.
• Plans call for the initiative to double to 20 buildings, with additional locations beyond Abilene, he added. Details about the location or timing of the other data centers were not announced.

Dive Insight:

The news arrives as the construction industry works on an already full pipeline of data center projects.

Hyperscalers and tech companies are racing to expand their data center capacity to meet growing demand. Big tech companies were on pace to pour more than $180 billion into data center expansions and related infrastructure costs last year, according to Dell’Oro Group.

That’s good news for contractors in the data center space. Trump expects the privately funded initiative to drive significant investments into the U.S. data center market and secure the United States’ leadership in AI innovation and infrastructure. 

“Beginning immediately, Stargate will be building the physical and virtual infrastructure to power the next generation of advancements in AI,” said Trump during the press conference. “This will include the construction of colossal data centers — very, very massive structures.”

In addition, Trump pledged to streamline permitting and accelerate project timelines to ensure the initiative’s success. He said energy projects will play a key role to support this AI infrastructure buildout.

“I'm going to help a lot through emergency declarations, because we have an emergency, we have to get this stuff built,” said Trump. “So, they have to produce a lot of electricity, and we'll make it possible for them to get that production done very easily, at their own plants if they want. They’ll build energy generation."

The Midwest’s largest contractor announced a major leadership change Wednesday while also unveiling a new business unit to accelerate data center construction efforts.

Russ Burns, CEO of Chicago-based Clayco, retired from his post at the end of last year and has been replaced by Anthony Johnson, formerly executive vice president and head of the company’s industrial business unit. Johnson, a 17-year Clayco veteran, grew the unit into a top-ranked builder in each of its market segments, per the announcement.

Burns helmed the design-build firm, which recorded $5.3 billion in 2023 revenue, for over 17 years. He will continue to serve as chairman of the board of advisors. 

"Russ Burns has been a transformational leader for Clayco," Bob Clark, founder and executive chairman at Clayco, said in the release. "In his time as CEO, Clayco has rapidly expanded to become one of the largest builders of technical, mission critical projects in the United States, and we are beyond grateful for his contributions.”

The leadership change coincides with the launch of Clayco Compute, an integrated data center delivery business unit focused on exclusively highly specialized construction of advanced technology centers.

The expansion is designed to capitalize on growing demand for advanced data center and quantum computing construction projects, according to the release. Clayco claims to have completed or currently undertaken over $12.7 billion in advanced technology projects. In 2024, Clayco generated $3.6 billion in revenue on data center projects, accounting for half of the firm’s total revenue, the firm said.

Clayco Compute is projected to continue that growth, per the announcement, expecting to reach over $4.5 billion by 2026.

Other changes

In addition to Burns’ retirement and Johnson’s promotion, the company announced other leadership changes. They include:

• Shawn Clark, CEO of CRG, Clayco's real estate development arm, will take on the newly created role of Clayco's chief strategy officer.
• Steve Sieckhaus, enterprise COO, has also assumed the role of enterprise president.
• Kevin McKenna, the current president of construction, will also assume the newly created role of chief administrative officer of the Clayco Enterprise.
• Bret Litton, senior vice president of finance, has been promoted to chief business officer.
• Mike Pierle has been promoted to COO, Construction.
• Jim Havel, Clayco Enterprise’s CFO, is retiring after more than 40 years in the financial sector. He will continue to serve on Clayco's board of advisors.
• Justin Lienemann has been promoted to succeed Havel as CFO of Clayco Enterprise.

First established in 1984 in St. Louis, Clayco has grown substantially in the last 40 years. The contractor moved its headquarters to Chicago in 2013, and today has over 3,500 full-time employees.

Dive Brief:

• Microsoft expects to spend roughly $80 billion on AI-enabled data centers to train large language models and deploy AI and cloud-based applications during its current fiscal year, the company’s Vice Chair and President Brad Smith said in a Friday blog post. 
• More than half of the investments will be in the U.S., according to Smith. The tech giant’s current fiscal year 2025 runs through June 30.
• AI workloads triggered cloud capacity constraints last year, ratcheting up an ongoing data center building boom. Microsoft responded by nearly doubling capital investments to $20 billion in the first quarter of its 2025 fiscal year, CFO Amy Hood said during an October earnings call. “We expect capital expenditures to increase on a sequential basis given our cloud and AI demand signals,” she added.

Dive Insight:

Cloud infrastructure, AI compute capacity and domestic politics coalesced in Smith’s post, which laid out a three-pronged plan for U.S. economic success centered around data centers, upskilling and technology exports.

“The incoming administration can strengthen these foundational elements, building on the work from President Trump’s first term,” Smith said, pointing to the 2019 American AI Initiative. “President Trump and Congress should expand on these efforts to support advancing America’s AI leadership.”

Microsoft has been growing its Azure public cloud empire at home and abroad. 

In addition to breaking ground on a $3.3 billion Wisconsin facility last year, Microsoft launched its first data center region in Mexico and further expanded its cloud footprint in France, Germany and Sweden.

“We intend to invest more than $35 billion in 14 countries within three years to build trusted and secure AI and cloud data center infrastructure,” Smith said. “This is part of a global infrastructure that now reaches 40 countries.”

In September, the company partnered with investment firms Blackrock, MGX and Global Infrastructure Partners to amass $100 billion for data centers and supporting power infrastructure.

Microsoft isn’t operating in a vacuum. AWS and Google Cloud, the two other global cloud giants, are also pouring billions into AI infrastructure, driving massive growth in the data center market.

Big tech companies spent $180 billion on data center expansions and related infrastructure last year, according to Dell’Oro Group research. The firm told CIO Dive it expects some cooling in the coming months as cloud providers consolidate expansion plans.

But hunger for AI-optimized compute has only intensified.

Hyperscalers were on pace to deploy over 5 million AI accelerators in 2024, Dell’Oro Group found in its analysis of third quarter financials.

“Demand for accelerators has been growing at a breakneck pace as the hyperscalers race to deploy infrastructure for the training and inference of large language models,” Baron Fung, senior research director at Dell’Oro Group, said in the report.

Microsoft sees its success as dependent on a competitive technology ecosystem, Smith said in the blog post. “This includes our longstanding competitors, chip suppliers, applications companies, systems integrators, service providers, and the millions of software developers who use our products to create customized solutions,” he said.

Jacobs CEO Bob Pragada said Tuesday he is not seeing client hesitation despite concerns over current and potential tariffs.

“As the narrative is getting way out ahead, what this does represent for us is an opportunity to be a key and trusted advisor for our clients in how that might have an effect on their supply chains,” Pragada said regarding tariffs during a call with financial analysts to discuss earnings. “We’re not seeing it as a huge threat. Rather, we see it as an opportunity to assist our clients, while that political narrative continues to oscillate in different directions.”

Pragada also noted deregulation efforts by President Donald Trump’s administration will help move projects forward.

“Some of the deregulation is actually serving as a catalyst to accelerate some of these jobs that we have had either in our backlog or that are in the pipeline,” said Pragada.

The Dallas-based construction company reported strong growth in its infrastructure, water and advanced facilities segments, according to its fiscal first quarter earnings report. Major projects in these categories include a 10-year water treatment contract in Jackson, Mississippi, and infrastructure jobs in Europe and Australia.

“We saw solid revenue growth year over year, mainly in our infrastructure and advanced facility segments,” said Pragada. “We’re demonstrating impressive revenue growth globally in water and environmental control, with all major geographies showing strength in Q1.”

Data centers and manufacturing facilities are fueling growth expectations, said Pragada. Jacobs’ data center business posted double-digit expansion, while reshoring efforts in manufacturing are expected to drive additional activity later in the year, he said.

“Data centers continue to be a real positive for us,” said Pragada. “It’s now to the size where you can actually see it. It’s still 40 to 50 basis points, but it’s actually contributing to the overall growth of the company.”

The news comes at a time when contractors are uncertain about impacts from potential tariffs on materials costs. A jump in materials prices would likely prompt builders to raise bid prices, which could potentially undermine future demand for construction projects.

But Jacobs doesn't see political uncertainty stalling activity in its portfolio.

“The sentiment of our customers continues to be positive. The political narrative is pretty robust right now, and so, it’s not that we’re ignoring it, we’re considering it, but we’re staying close to what our customers are saying,” said Pragada. “We’re seeing double-digit pipeline growth across our end market sectors. The cadence of our awards, as demonstrated in our backlog growth, continues to be there.”

Takeaways from earnings

Jacobs lost $18.13 million for its fiscal first quarter 2025, which ended Dec. 27, 2024, compared to $171.61 million in profits a year ago. Its revenue for the quarter reached $2.93 billion, a 4.4% increase from $2.81 billion in the fiscal first quarter of 2024, according to the company’s earnings report.

The Dallas-based company’s backlog jumped to $21.8 billion, an 18.9% increase from $18.4 billion a year ago.

Analysts praised the results, largely due to strong momentum across key sectors and continued demand for its consulting services.

“Jacobs delivered a solid first quarter, with revenue and earnings per share exceeding expectations,” said Faisal Hersi, equity analyst with financial services firm Edward Jones in a research note. “The company’s order backlog also exceeded our expectations.”

Hersi added that Jacobs stands to benefit from rising infrastructure investments in both the U.S. and international markets. He said life sciences, water and data centers are well positioned for further growth.