For years, infrastructure stocks were portfolio-ending stocks, as the red lines and straight lines dominated their stock price charts from 2014 until 2025. In that entire decade, environmental rules and project and construction delays due to slower approval rates plagued infrastructure stocks. But the world has changed for infrastructure stocks after Mark Carney became the Prime Minister of Canada on March 14, 2025. Among his nation-building focus is infrastructure for energy, logistics, artificial intelligence (AI), and housing.
Source: Getty Images
Why I think now is the moment to invest in infrastructure
The infrastructure sector is cyclical and needs government support. The Canadian government is fast-tracking approvals by streamlining regulatory approvals, allocating federal funding, and creating a Major Projects Office. The biggest challenges for infrastructure projects are regulatory delays and capital costs. With the government addressing these issues, companies are expanding their capital program.
You can see critical capital projects from Enbridge, Pembina Pipeline, Capital Power, and BCE. Enbridge has US$40 billion worth of green energy and natural gas pipeline projects scheduled to commission in the next three years. Recently, the federal government announced $10 billion in federal financing, the largest clean energy investment in North American history.
Which infrastructure stocks to buy now
You can invest in AI and energy infrastructure stocks that are investing capital. But the drawback is that their stocks might not grow immediately, as high capital expenditure will increase debt and depreciation, thereby affecting net profit and free cash flow in the short-term. However, their growth could pick up as projects come online and start paying for themselves. They can be good dividend payers in the future.
But if you are looking for capital appreciation, construction companies are a good investment. They are the ones who are winning the infrastructure orders. They are the recipient of the capital expenditure. Just as the AI boom benefitted semiconductor stocks more than AI applications in the initial growth cycle, construction stocks will benefit from the infrastructure boom.
Bird Construction
Bird Construction (TSX:BDT) is a stock worth considering for short-term capital gains. Its order book has grown 44% in 2025 to $11.1 billion. Among these orders are some high-investment projects like the BCE AI data centre, Woodfibre LNG Project, and nuclear facilities. Bird has experience in building energy transmission projects and could be a key beneficiary of the additional federal funding that will boost clean energy projects.
Among all construction companies, I prefer Bird Construction because of its strong balance sheet. The company’s net debt is less than 1 times its adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA). It is prioritizing high-margin projects and expects to grow its adjusted EBITDA margin from 6.5% in 2025 to 8% by 2027. The cyclical rally has increased the stock price to its all-time high, making value investors nervous about entering at this point.
However, cyclical stocks like Bird Construction rally exponentially during the initial phase of order wins. During the execution phase, their growth slows as investors have already priced in the project earnings into the stock price on the news of order wins.
The growing government investment in infrastructure shows that more orders are in the cards, which means another growth cycle is likely.
Celestica stock
Not an infrastructure stock but a supplier to AI infrastructure developers, Celestica (TSX:CLS) is a third-party electronics manufacturer. All the capex investment in AI and connectivity infrastructure needs Ethernet switches and storage. This boosted demand for Celestica’s manufacturing services. It even expanded to become an original design manufacturer, creating an opportunity to earn higher income.
While the stock has already priced in revenue growth from network expansion, the demand for Enterprise chip solutions from hyperscalers presents new growth areas. The current dip is a buying opportunity as growth will widen as more buildings are built.
Investor takeaway
The infrastructure cycle is still in the early stage, creating a buying opportunity to benefit from another six months to one year of a cyclical rally.
