Dycom Industries (DY) would likely pick up a sizable share of work for the emerging data center fiber interconnections opportunity, given the company's existing share and scale to execute on the largest projects, UBS Securities said in a note Friday.
Assuming a 15% to 20% market share for Dycom, data center fiber interconnections work could represent about $900 million to $1.2 billion of revenue for the company per year in 2028 to 2029, according to the note.
The investment firm said most of the work in 2026 will likely include overpulling, or adding fiber to existing electrical tubes, with construction of new routes expected to ramp up considerably in 2028 to 2029.
The firm said its model suggests a $19 billion market opportunity for telecom contractors from data center fiber interconnections over 2025 to 2029, with $14 billion of spending over 2027 to 2029, and annual spending nearly tripling between 2025 and 2029 to about $6 billion from roughly $2.3 billion.
UBS Securities maintained its buy rating and $611 price target on the stock.
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