Data center investment cycle ‘still in early stages’: Jacobs CEO

Demand for artificial intelligence infrastructure isn’t hitting the brakes, and it continued to fuel growth for Jacobs in its fiscal second quarter, executives said during the firm’s earnings call on Tuesday.

The Dallas-based firm finished its fiscal first half with what CEO Bob Pragada called “significant momentum.” He pointed to sustained demand across data centers, semiconductors, water, energy and power as major drivers for backlog expansion.

“We see very strong runway to build on that success in the second half of the year,” said Pragada during the call. “The investment cycle is still in the early stages.”

Much of that growth stems from AI-driven infrastructure, particularly data centers, said Pragada during the call. The company’s data center business grew by more than 100% year over year in the quarter, largely due to hyperscaler investments into construction and advisory services, he added.

“AI is absolutely driving our business,” said Pragada. “We’re seriously at an inflection point, and it’s accelerating our entire business.”

Data centers currently account for about 3% to 4% of Jacobs’ business, said Pragada. He added the entire AI infrastructure ecosystem represents roughly 10% of its portfolio. That portion of Jacobs’ business is growing in excess of 40%, he said.

“You’re talking about a significant part of our business that’s growing at a very fast rate,” said Pragada. “All centered around the AI infrastructure build.”

That data center buildout is creating opportunities elsewhere as well, according to the company.

“We’re seeing rising demand in semiconductors, water and energy and power as the technology and infrastructure go hand in hand,” said Pragada. “This is bolstering total revenue growth.”

These supporting projects, along with the data center facility, are imperative in the AI infrastructure buildout and remain in high demand, said Pragada.

“We’re tracking very well heading into the second half of the fiscal year with strong Q2 performance enabling us to increase our full-year outlook for the second consecutive quarter,” said Pragada. “We’re seeing momentum in our growth rate, margin and bookings trajectory, all of which give us confidence in our outlook.”

Q2 by the numbers

Jacobs swung to a loss of $45.88 million for its fiscal second quarter 2026, compared to a $5.61 million profit in the same period last year. The firm attributed the loss to finalizing its acquisition of the remaining stake of PA Consulting. Revenue for the quarter totaled $3.69 billion, up about 27% from $2.91 billion a year ago.

Backlog increased to $26.97 billion, up 21.7% compared to $22.16 billion in the prior year, according to the earnings report.

“Results topped expectations on both revenue and margins,” wrote Andrew Wittmann, senior research analyst with Baird, in a research note. “Ultimately, its infrastructure and advanced buildings businesses are benefiting from strong demand, much of which is along the AI value chain with rapid growth from a prior very small base.”