Can Dycom Offset Wireless Softness With Surging Fiber Demand?

Dycom Industries, Inc. DY is gaining from accelerating growth across fiber and digital infrastructure. The incremental increase is sufficient to offset pockets of softness in some parts of the wireless market. The telecommunications infrastructure environment is expanding as hyperscalers and large technology companies invest in long-haul and middle-mile fiber networks to support rising data usage and new compute requirements.

During the first nine months of fiscal 2026, Dycom’s contract revenues grew 13% year over year to $4.09 billion, driven by robust demand for telecommunications and digital infrastructure, fueled by accelerating fiber builds, a massive ramp-up in data center needs and the optimism surrounding the BEAD program. The Broadband Equity, Access and Deployment (BEAD) program is the United States government’s initiative aimed at expanding high-speed Internet access across the country. The final BEAD deployment plans for 15 states and three U.S. territories have been approved, with about $26 billion to be used to serve roughly two-thirds of the total locations with fiber or HFC infrastructure.

Dycom believes that the market is in the early stages of a generational deployment of digital infrastructure, with the construction of new outside plant data center networks to ramp up in the 2026 calendar year. These prospects are in favor of the company, given its expertise in handling highly complex and large-scale builds, and are expected to continue into 2027 and beyond, backed by favorable market fundamentals. As of October 2025, DY’s total backlog grew 4.7% year over year to $8.22 billion, with the next 12-month backlog rising 11.4%.

Besides, Dycom’s pending acquisition of Power Solutions expands it into mission-critical data center electrical infrastructure, creating an even broader platform to capitalize on soaring AI-driven construction. Thus, the company’s fiber and data-infrastructure opportunities are not only offsetting wireless lulls but also reshaping its long-term growth trajectory.

Dycom vs. Other Market Players

Dycom stands out in the telecommunications infrastructure market through its intense specialization in fiber deployment, alongside long-haul and middle-mile network construction. But it does not free it from facing competition from key market players, including Quanta Services, Inc. PWR and MasTec, Inc. MTZ.

Quanta has a broader portfolio spanning electric power, utilities, pipelines and renewables. Its telecom exposure is smaller and less concentrated, giving DY a sharper strategic focus in the very segment experiencing its strongest secular tailwinds. On the other hand, MasTec is diversified across energy, power and clean-energy construction. It participates meaningfully in telecom but lacks the same level of direct fiber-to-the-home density and outside-plant expertise that Dycom has built over decades.

A core advantage for DY is its ability to self-perform highly complex fiber builds at scale, supported by a national workforce and record backlog tied to fiber, hyperscaler buildouts and BEAD-funded rural expansion. This focus contrasts with Quanta and MasTec, which balance telecom against multiple non-telecom revenue streams. It can be said that Dycom holds a competitive advantage through telecom-first scale, execution capabilities and a backlog heavily weighted toward the highest-growth segment of U.S. communications infrastructure, differentiating it from both Quanta and MasTec.

DY Stock’s Price Performance & Valuation Trend

Shares of this specialty contracting firm operating in the telecom industry have trended upward 42.1% in the past three months, outperforming the Zacks Building Products - Heavy Construction industry, the broader Construction sector and the S&P 500 Index.

DY stock is currently trading at a premium compared with the industry peers, with a forward 12-month price-to-earnings (P/E) ratio of 24.61, as evidenced by the chart below.

Earnings Estimate Trend Favors DY

DY’s earnings estimates for fiscal 2026 and fiscal 2027 have trended upward over the past 30 days by 5.6% and 36.9%, respectively. The revised estimated figures for fiscal 2026 and fiscal 2027 imply year-over-year growth of 25.2% and 42.3%, respectively.

The robust market fundamentals and DY’s strategic in-house capabilities are likely to have induced bullish sentiments among analysts.

Dycom stock currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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