The Case for Buying Comfort Systems USA Stock More Than 20% Below Its All-Time High

Comfort Systems USA (NYSE: FIX) has been a linchpin for AI infrastructure. Data centers need HVAC, plumbing, piping, and electrical systems, which Comfort Systems USA provides. Demand for these services should only go up as AI data center construction continues.

However, the stock is down by more than 20% from its all-time high. Investors who bought their shares at the start of the year are still sitting on a nice gain, and shares are up by almost 2,000% over the past five years. That doesn't offer any solace to shareholders who started positions at their highs, but they may not have to wait for long.

Comfort Systems USA looks like a bargain at current levels and could reclaim its all-time high soon.

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Data center demand is accelerating

A core part of the Comfort Systems USA thesis is that demand for AI data centers will continue to accelerate. The U.S. has more than 3,000 operational data centers, with more than 1,500 data centers currently being built.

A large number of these upcoming data centers are being developed in rural areas. Since rural areas are more spacious than urban centers, it gives data center builders more flexibility to make their sites bigger. If data centers are larger, Comfort Systems USA will have to apply more of its solutions to each site. Getting the HVAC right for a 1-gigawatt site is a lot more lucrative than performing the same tasks for a 10-megawatt facility.

AI data centers, in particular, are gaining momentum. Fortune Business Insights anticipates a 25.8% compound annual growth rate (CAGR) for these facilities through 2034.

Comfort Systems USA also makes money maintaining data centers

Comfort Systems USA makes a large portion of its revenue during construction. HVAC systems and other components must be properly set up so the building can function efficiently. This demand for services during construction is one of the reasons why Comfort Systems USA generated $3.27 billion in the second quarter, which was a 51% year-over-year increase.

However, Comfort Systems USA also makes money by maintaining existing data centers. Systems must be repaired and maintained for data centers to continue functioning at a high level.

While Comfort Systems USA still makes most of its revenue during the construction process, its maintenance revenue should surge as more data centers are built. Each data center it constructs can turn into a steady, long-term income source for the company.

The acquisition strategy continues to increase market share

Other competitors exist in this industry, but Comfort Systems USA's acquisition strategy ensures it can continue to gain market share. Comfort Systems USA has more than 50 companies under its control across 184 locations throughout the U.S. The company outperforms many competitors and also has the option to absorb competitors that are doing well in desirable markets.

This acquisition strategy, plus demand for data center facilities, explains why Comfort Systems USA wrapped up Q2 with a $14.06 billion backlog. That's almost double the $8.12 billion backlog from Q2 2025, and it also represents a 13% sequential boost.

The momentum is unlikely to fade anytime soon. Comfort Systems USA CEO Brian Lane told investors in the Q2 press release that the company is "optimistic about [its] results for the remainder of 2026 and well into 2027."

These aren't the types of results that warrant a 20% drop from all-time highs. The stock trades at a price/earnings-to-growth (PEG) ratio below 1, which implies that it is currently undervalued. Multi-year tailwinds from the AI build-out suggest that it can continue to deliver high revenue and net income growth rates that will make the current price look like a great deal for patient investors.

Marc Guberti has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Comfort Systems USA. The Motley Fool has a disclosure policy.