Here's Why Comfort Systems Soared More Than 23% in April and Is Set to Be a Winner in Trump's Presidency

Lee Samaha, The Motley Fool

Mon, May 5, 2025, 9:38 AM 3 min read

• The company's end markets and its backlog continue to grow strongly.

• Spending on data centers and semiconductor fabrication plants remains robust.

• Reshoring manufacturing to the U.S. would greatly benefit Comfort Systems.

Shares in Comfort Systems USA (NYSE: FIX) soared by 23.3% in April, according to data provided by S&P Global Market Intelligence. The move comes as the company's first-quarter earnings allayed fears that its growth was set to slow and leave its valuation exposed.

Comfort Systems is a mechanical and electrical contractor. Slightly more than three-quarters of its revenue comes from the mechanical side (heating, ventilation, air conditioning, plumbing, piping, controls, etc.) and the rest from electrical (installation and servicing of electrical systems).

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The following chart explains its booming share price (up an incredible 1,250%). As you can see below, it's been boomtown for U.S. investment in manufacturing and nonresidential construction spending, driven by a combination of a recovery from the pandemic, infrastructure spending, the CHIPS Act, and torrid growth in spending on data centers to support artificial intelligence (AI) application growth.

The fear was that this burgeoning growth would start to slow in 2025. However, the company's first-quarter earnings, released in late April, helped dispel this notion, not least as the company reported a backlog of $6.9 billion at the end of the quarter compared to almost $6 billion at the end of 2024.

Moreover, Comfort continues to see strength in technology spending (including data centers and semiconductor fabrication plants), rising 30% compared to the same period last year -- it now comprises 37% of total revenue.

Discussing its end markets on the earnings call, CFO William George said about data center capital spending, "There is no sign of a letup in demand for electricians, pipe fitters, and plumbers to help build data centers and, frankly, lots of other things."

It's a reassuring commentary, given that there were concerns that the AI/data center investing theme may run into trouble due to a potential slowdown in spending.

The company's backlog continues to grow, and Wall Street expects another year of double-digit revenue growth in 2025. Moreover, there's a long-term growth opportunity coming from the potential reshoring of manufacturing to the U.S., either via new construction or expansions to existing facilities. While Comfort is obviously not immune to a possible economic slowdown caused by trade conflict reducing capital spending on facilities, it looks like a likely winner if President Donald Trump succeeds in revitalizing the U.S. industrial base.