The Builders Behind the Boom

Every AI model needs a building to run in, and every building needs someone to pour the foundation, hang the steel, and wire the power. That is the data-center construction trade, and it has quietly become one of the most direct ways to invest in the AI buildout without buying a chipmaker.

Michael Brush’s first pitch for Cabot Insider Edge, “I Just Found the 3 Stocks Behind $11.3 Million in Insider Buying,” reaches for this niche. One of the three picks is Cardinal Infrastructure (CDNL), a Southeast construction-services rollup that the promo holds up next to Sterling Infrastructure, the data-center builder that has been one of the sector’s clearest success stories.

The Sterling Infrastructure Comparison

The whole bull case for Cardinal rides on this comparison. Sterling Infrastructure grew into a market darling by building the site work and civil infrastructure underneath data centers, power plants, and industrial facilities. The promo wants investors to see Cardinal as the next version of that, a vertically integrated contractor riding the same wave.

The comparison is real but loose. Sterling Infrastructure trades around 20 times forward earnings, and Cardinal trades around 18 times, so the multiple looks modestly cheaper. But a multiple is only as good as the business behind it. Cardinal’s actual revenue mix tilts toward residential and commercial work across the Southeast, which makes it more of a housing-development bet today than a pure data-center builder.

The Insider Signal

The hook that ties the whole promo together is insider buying, and Cardinal is the biggest piece of it. Insiders bought about $8.1 million, with the actual total above $9 million, and the centerpiece is a roughly $3 million purchase by the CEO against a $450,000 salary.

That is the kind of cluster buying the research actually supports. When C-suite executives buy at market prices in meaningful size, the studies point to a modest edge of around 3% to 5% over the next six to twelve months. It is not dramatic, but it is real, and a $3 million CEO buy against a $450,000 salary is a strong version of the signal.

The Drawdown

Cardinal’s chart is a reminder of how volatile the data-center trade can be. The stock went public in December 2025 at $21 a share, ran to a June high, then fell roughly 50%. The six-month lockup expired, a $320 million raise priced at $73 a share diluted early holders, and the August 11 quarter beat on revenue but missed on earnings and margins. The shares slid from the $90s into the $30s, closing near $36.98 on August 31.

The promo’s growth figures, earnings up 114%, backlog up 35%, and management guiding toward 95% revenue growth, are not made up. They just did not stop the selloff. That is the lesson of this niche: demand can be booming while the builders still get repriced when margins disappoint.

The Dual-Class Catch

There is one more wrinkle before the Sterling Infrastructure comparison holds up. Cardinal is dual-class. The founder and family hold about 27.5 million non-traded Class B shares plus roughly 20 million trading Class A shares. Consolidated net income lands near $37 million, but only about $18 million is attributable to common shareholders.

That gap matters because it changes what the 18-times-forward-earnings multiple actually measures. It is priced off the Class A slice, not the whole company. The company-specific numbers lay this out, and the broader construction sector shows how common the founder structure is among rollups.

The Real Trade

The data-center construction niche has genuine momentum. The data-center buildout is not slowing down, and the contractors with real exposure to it have been rewarded. The question for Cardinal is whether it belongs in that bucket at all, or whether it is a housing story wearing a data-center label.

The distinction matters for sizing. A company with genuine data-center backlog deserves a premium for the visibility. A rollup that mostly builds homes and commercial space in the Southeast does not earn the same benefit just because it gets compared to Sterling Infrastructure.

What to Watch Next

The data-center construction trade lives and dies by the pipeline. Hyperscalers keep announcing new campuses, but the constraint has shifted from demand to power. A new data center needs a substation and a grid connection before the first shovel hits dirt, and the builders who can line up both are the ones with real pricing power.

For Cardinal, the watch items are more specific. The backlog figure, up 35%, is the number that matters most, because it tells you whether the company is winning new work at acceptable margins or simply extending existing jobs. The second is the margin trend after the August miss, which showed revenue can beat while profitability still disappoints. The third is how much of that backlog is actually data-center and infrastructure work versus the residential and commercial jobs that make up the bulk of the business today.

Those three questions will determine whether Cardinal ever earns the Sterling Infrastructure comparison or just borrows it.

The Verdict

Data-center construction is a real and growing trade, and Cardinal’s insider buying is genuine and sizable. The catch is that the Sterling Infrastructure comparison flatters a business whose revenue is more residential than hyperscale, and the dual-class structure further clouds the cheap-looking multiple. Worth a look, but not at face value.

Ready to see the research? Click here to access Michael Brush’s report.

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