Brookfield Infrastructure's 2026 Outlook: Digital Data Segment Expansion Drives Growth

Picture an electricity network in the middle of a global expansion, or a data center cooling system designed to run for decades without a hiccup. That is the world of Brookfield Infrastructure Partners (NYSE:BIP). As a global owner and operator of critical utility, transport, midstream, and digital platforms, it focuses on the unglamorous but essential physical assets that keep the modern economy functioning. With the stock trading at $36.88 as of Sept. 11, 2026, and delivering a 19% return over the past year, it serves as a massive, complex machine built to convert inflation-linked utility contracts into steady cash flow.

Our proprietary Hidden Gems scoring system assigns Brookfield Infrastructure Partners an overall Superscore of 77 out of 100, placing it in the Strong category. This score evaluates financial performance, market position, technology, leadership, and valuation to provide a single signal for the company's health. A 77 places it in the Top ~15% of every company we score. The Superscore is one data-driven signal worth investigating, and this article pairs the reasons the score is high with the reasons it is not higher, so you can weigh both sides before doing more work.

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Why BIP Has a 77 Superscore

• Data segment growth: The company generated over $1 billion in revenue from its data segment during 2025 by commissioning 220 megawatts of hyperscale capacity to meet the surging compute demand of the AI era.
• Disciplined capital recycling: By divesting mature, lower-yielding assets--such as its Australian export terminals--the company crystallizes value at attractive prices to fund higher-growth digital infrastructure without relying on excessive debt.
• Inflation-linked contracts: Roughly 90% of the company's cash flows are derived from regulated or contracted long-term agreements, which provide a reliable defensive buffer against economic volatility.
• Operational efficiency: The company has maintained stable SG&A expenses over the last five years, even as its total revenue grew at a 19% CAGR from 2021 to 2025, demonstrating strong operating leverage across its global platform.

Why Is BIP's Superscore Not Higher?

• Strained interest coverage: Interest coverage compressed to 1.5x in 2025 as the company managed a $69.1 billion debt load, leaving a tighter margin for error in a high-interest rate environment.
• Complex corporate structure: The partnership model involves master services agreements and concentrated ownership by its sponsor, creating potential conflicts of interest for minority unitholders in strategic capital allocation.
• High valuation risk: The stock currently trades at a trailing P/E of 41.72, which leaves little margin for error should the company's organic growth or capital recycling pace begin to cool.

In Brookfield's case, tracking funds from operations (FFO) is a better measure of valuation than P/E. The company maintains a high return on net tangible assets, which ranks in the top ~39% of companies we track. Because it is a highly capital-efficient business that earns outsize profits on a relatively small base of hard physical assets, the market often pays a premium for its ability to turn every point of revenue growth into durable cash flow.

Hidden Gems Database Scores for Brookfield Infrastructure Partners (BIP)

The Hidden Gems Superscore reflects The Motley Fool's proprietary AI-driven evaluation of a company across product, financial, leadership, and valuation pillars as of the article date and may change over time. Performance figures are point-in-time. Past performance does not guarantee future results.

Is BIP Right For Your Portfolio?

This stock warrants a closer look if...

• You are searching for durable exposure to electric utility stocks that also provide an inflation hedge through contracted cash flows.
• You want to participate in the AI build-out by owning the physical utility and data center backbone rather than pure-play software assets.

You may want to keep researching before buying if...

• You are sensitive to high corporate debt levels and the potential for interest rate volatility to impact cash flow margins.
• You prefer companies with simpler corporate structures that offer minority shareholders more direct influence over strategic decisions.

The Superscore is one data-driven signal worth investigating, not a stand-alone buy recommendation; you should weigh it against your own research, financial goals, and risk tolerance before acting.

My 5-year prediction for BIP stock

Brookfield Infrastructure can play a niche role in any equity portfolio. Owning it is similar to having a financial advisor or portfolio manager for your infrastructure asset holdings. Managers at Brookfield have proven to be asset allocation experts. They transparently recycle capital by selling existing assets that have increased in value, and replacing them with new assets expected to bring higher returns.

The company aims to recycle $3 billion again in 2026, as it did last year. Brookfield Infrastructure targets a total annual return of 12% to 15% on invested capital over the long term. Brookfield can fit like an electric utility in a portfolio, but with much more potential for growing its return on assets.

Brookfield's company structure is a bit complicated, though. That's where even more potential lies for investors. Brookfield Infrastructure is planning to merge its partnership and corporate entities into a single traditional corporation following special shareholder meetings on Oct. 14. The meetings are for BIP unitholders and Brookfield Infrastructure Corporation (NYSE:BIPC) shareholders. BIPC was created to offer investors an alternative to the original partnership that can add complexity come tax time.

The structure simplification plan aims to convert BIP and BIPC into one publicly traded corporation, Brookfield Infrastructure Partners Inc. The benefits the company expects include improved trading liquidity, increased demand from existing indexes, and the potential for additional index inclusion. It will also simplify analyses of the entity, attract a larger pool of investors, and, importantly, remove burdensome tax reporting forms for BIP partnership holders. It could also result in favorable dividend tax rates for many investing in taxable accounts.

Considering that the Brookfield corporate entity (BIPC) has traded at up to a 20% premium to the partnership over the past year, I would expect the newly combined corporate structure to command a premium. Combine that with management's expected annual shareholder returns mentioned above, and I believe Brookfield Infrastructure stock will be worth about $55 per share in five years. That could provide investors with market-beating returns, especially including its generous dividend. And with the added comfort of an experienced and trustworthy management team.

Howard Smith has positions in Brookfield Infrastructure and Brookfield Infrastructure Partners. The Motley Fool recommends Brookfield Infrastructure Partners. The Motley Fool has a disclosure policy.