The stock market was mixed on Tuesday, with S&P 500 and NASDAQ closing higher. The former was up 0.2% to 5,833, while the latter rose 0.8% to 18,713.
Investors awaited key corporate earnings releases, including earnings reports from big tech names such as Alphabet (GOOGL).
Tweet of the Day
This is fabulous news.
1st it allows the US to make advanced semiconducters like they do in Taiwan.
2nd it lessens our dependance on $TSMC factories in Taiwan, which lowers political risk from China. https://t.co/vQJ9MeJ61W
— David Sharek (@GrowthStockGuy) October 24, 2024
Chart of the Day
Here is the one-year chart of Sterling Construction (STRL) as of September 25, 2024, when the stock was at $146.
Sterling Construction has been a hot stock in the past two years as the company builds data centers. Last quarter, it delivered 31% profit growth on 12% revenue growth. Sterling Construction is growing profits faster than revenue as management shifts its mix towards higher margin services.
The E-Infrastructure Solutions segment (which includes data centers) saw a 7% decline in revenue as the company moved away from smaller commercial projects. However, operating income surged by 20% due to a focus on large, mission-critical projects such as data centers and manufacturing. Revenue from data centers grew by over 100%, and now constitutes more than 40% of that segment’s backlog.
Small commercial and warehouse projects have softened and are not as attractive due to lower profit margins. Management anticipates continued strength in data centers as current capacity is only a fraction of what is needed to support Artificial Intelligence (AI). The company now has three sizable data center projects in the Rocky Mountain region.
STRL is on the radar of our Growth Portfolio.
