Image Credit: Associated Press
Key Points
- MasTec’s $1.65 billion acquisition of Superior moves it inside the data-center fence, allowing the company to provide electrical infrastructure both inside and outside data centers and creating a more complete end-to-end offering for customers.
- Superior is expected to add up to $900 million in 2026 revenue and as much as $2.5 billion in 2027, while MasTec already has a record $21.4 billion backlog.
- Investors should watch how well MasTec integrates Superior, converts its backlog into cash flow, and turns its new inside- and outside-the-fence capabilities into additional AI-infrastructure business and data-center contracts.
MasTec (MTZ), a fast-growing Florida-based infrastructure engineering and construction company, announced on July 20 that it completed its acquisition of Superior, a full-service electrical contractor specializing in critical infrastructure, for roughly $1.65 billion.
Let’s look at the deal and see how, with the stroke of a pen, MasTec made itself a serious “picks and shovels” data-center player for the artificial-intelligence (“AI”) build-out.
What MasTec Acquired in the $1.65 Billion Deal for Superior
From a data-center service provider’s perspective, “inside the fence” or “outside the fence” is exactly what it sounds like.
If you’re inside the fence, your technology, equipment, and systems live within the physical boundaries of a data center. If you’re outside the fence, you’re supplying resources to the data centers – which is important – but you’re not part of the internal ecosystem. Think of the public electrical grid, local utilities, etc. Literally on the outside looking in.
The deal for Superior essentially puts MasTec inside the data-center fence, where service, technology, and equipment providers want to be.
The price tag for this type of energy deal might imply the purchase of a pipeline or even a transmission business. But what MasTec acquired in Superior is actually a full-service electrical contractor that works within the walls of the data centers.
Superior’s roughly 3,000 employees immediately grow MasTec’s workforce, allowing the company to get inside the fence as it equips AI and cloud data centers with the necessary energy infrastructure, both within and outside the fence.
MasTec CEO Jose Mas said as much upon the deal’s completion last month:
We believe that the addition of Superior… coupled with MasTec’s existing operations, positions MasTec to serve the compelling and ongoing buildout of data center, power and mission-critical infrastructure, both outside and inside the fence.
This acquisition further advances MasTec’s strategy of building a scaled infrastructure capacity platform that is positioned to serve accelerating demand for data center, power and other mission-critical infrastructure…
The Strategic Advantage of MasTec Moving Inside the Fence
Until July 20, MasTec operated strictly outside the data-center fence. It built the transmission lines, substations, regional grid distributions, clean-energy sources (including wind and solar farms), networking lines, and natural gas pipelines that brought energy infrastructure right to the edge of the data-center property lines.
According to MasTec’s press release announcing the deal, Superior is already “strategically positioned in some of the most attractive U.S. data center development corridors and has demonstrated the ability to grow alongside its customers into new geographies… “
With Superior in the fold, MasTec can now build complex electrical systems within data centers, construct prefabricated models off-site to install in data centers, and manage performance within the buildings.
This is a huge advantage for MasTec. If you’re a hyperscaler or a data-center operator, it’s far more efficient to choose one business that can install your entire electrical infrastructure – both within the building and outside of it – rather than shop around for multiple companies to handle different tasks.
Now, MasTec has the resources to handle the whole operation from start to finish. It can do everything. Build the solar farm. Install the cables that carry the electricity. Create the utility substation outside the data center that receives the energy from the cables. Build the electrical server infrastructure within the server rooms inside the data center.
Clients benefit from this “one-stop energy shop” through on-site power generation that bypasses the overcongested electrical grid and potentially yearslong interconnection queues, plus potential energy savings through fixed power purchase agreements rather than fluctuating market prices. It’s a win-win.
By folding more than 2,700 skilled Superior electricians and technicians into its operation, MasTec instantly transformed itself from a competitive “outside the fence” electrical-infrastructure provider into a multifaceted builder of end-to-end electrical infrastructure whose capabilities have few rivals – companies like Quanta Services (PWR), Emcor (EME), and Rosendin Electric.
This strategic shift brings to mind how American energy giant GE Vernova (GEV) took end-to-end control over natural gas power generation in data centers.
MasTec Took a Page From the ‘Dark Energy’ Playbook
We’ve covered Professor Joel Litman’s “Dark Energy” thesis quite a bit in this space. But if you’re not familiar, my colleague Steven Longenecker explained Dark Energy in an early June article:
Dark Energy is Joel’s term for on-site, natural gas power generation built around a specific kind of turbine. It’s the first choice of AI data centers and hyperscalers for an uninterrupted source of off-grid electricity.
Steven further explained the concept in another Dark Energy-related article:
Dark Energy is a clean, reliable power source. Specifically, it’s a class of natural-gas turbines… essentially a jet engine adapted into an electric generator. They start in minutes, run on natural gas instead of jet fuel, and can produce tens of megawatts of power per unit. Stack enough of them together, and you have a private power plant.
Private power plant – that’s the key. I recently wrote about how GE Vernova (and its natural gas turbines) just created an end-to-end power station that covers the entire energy spectrum both inside and outside of a data center.
Here’s how that could soon look:
MasTec’s acquisition of Superior essentially creates the same type of end-to-end offering, replacing natural gas energy with electricity. Of course, MasTec does not manufacture the equipment it’s installing, as GE Vernova does. But it will still provide electrical infrastructure from start to finish, inside and outside.
Here’s how that may look in a data center in the near future:
MasTec can now check off every box in that process, giving it an edge over companies that can only provide services inside or outside the data-center fence.
Why the Numbers Compelled MasTec to Acquire Superior
MasTec paid roughly $1.65 billion ($1.175 billion in cash, plus $475 million in stock) for Superior. Superior had projected 2026 revenue between $1.6 billion and $1.7 billion and projected adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) of $225 million to $250 million.
That means MasTec projects adding between $800 million and $900 million in revenue and $100 million to $115 million in adjusted EBITDA to its balance sheet for the rest of the year.
Looking ahead, MasTec estimates Superior will generate between $2.2 billion and $2.5 billion in revenue and between $250 million and $275 million in adjusted EBITDA in 2027.
Even before the Superior acquisition, MasTec had a record 18-month backlog in contracts valued at $21.4 billion, most of which will convert to revenue in 2027. The company also set a quarterly record during the second quarter of 2026, amassing $4.4 billion in revenue, a 23% year-over-year gain.
So, MasTec is adding a strong, stable, and profitable business in Superior to vastly expand its capabilities and reach – both in scope and geography. Together, those parts create an emerging electrical-infrastructure powerhouse.
That math makes a ton of sense.
MasTec Stock Analysis and What Investors Should Watch
MasTec stock has been on a yearlong upswing, having gained more than 32% in that period.
Chaikin Analytics, the investment-research platform founded in 2009 by legendary 60-year Wall Street veteran Marc Chaikin, gives MasTec a “neutral” rating in its Chaikin Power Gauge, a 20-factor stock-rating system that scans more than 5,000 stocks and 2,300 exchange-traded funds.
While MasTec ranks solidly across the Chaikin Power Gauge, the company’s low cash flow keeps it from a higher grade. But that situation is improving… if you look at the numbers closely.
While MasTech’s second-quarter free cash flow (“FCF”) was negative $59 million due to rising capital expenditures, it still generated $21 million in cash provided by operating activities. When compared with only $6 million in cash provided by operating activities in 2025’s second quarter, that’s a step in the right direction.
Plus, once the company’s significant backlog converts to revenue, MasTec will generate substantially higher cash flow. Management is fully expecting it, stating during the company’s earnings call that, “Overall, we expect over $1 billion of cash flow from operations for 2026, with the majority anticipated to come in Q4.”
The most fascinating aspect of the deal, to me, is how smoothly MasTec integrates Superior into its operations and how successfully the company pitches its new end-to-end electrical-infrastructure approach to hyperscalers and other potential clients.
MasTec’s third-quarter earnings call, scheduled for October 29, probably won’t fully reflect this new structure, so keep a close eye on the fourth quarter and beyond to see how successful MasTec is in securing more data-center contracts and implementations.
Investors need to determine whether MasTec’s acquisition of Superior makes the stock a stronger, full-service “picks and shovels” AI-power build-out investment than, say, companies that only manufacture energy equipment (and do so very successfully)… like Eaton (ETN) or Vertiv (VRT). They’re all appealing options with strong analyst “buy” recommendations.
But with an average price target from analysts of nearly $440 as of September 2, while trading at roughly $237, there’s some serious upside (roughly 85%) in MasTec stock.
Regards,
David Engle
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