Investing.com — IT Services stocks are experiencing mixed trading today as concerns about data center construction activity trigger selling pressure in some names, while education services companies benefit from small-cap momentum. Truist analysts highlight opportunities in stocks with manageable data center exposure despite near-term volatility.
The sector is showing divergent performance as investors rotate out of AI build-out themes, pressuring companies with data center construction exposure. Meanwhile, for-profit education stocks are rallying alongside small caps, outperforming broader market indices despite Democrats winning both chambers of Congress.
Historically, education services stocks have traded with Republican political fortunes, though analysts see limited fundamental impact from election results since the Education Department sets most sector regulation.
1. APi Group (APG, Buy) – Truist estimates data center projects represent approximately 8% of revenue currently and have contributed to recent strength in project demand. While a complete rollover in data center construction would negatively impact the stock, analysts believe the risk is manageable.
Previous sympathy sell-offs with data center construction names have proven to be buying opportunities throughout the year, including instances before the third-quarter earnings report. Truist recommends investors capitalize on today’s weakness to establish or add to positions.
2. Aramark (ARMK, Buy) – The company has smaller data center exposure compared to peers, but maintains more concentrated operations in Texas near-term. Truist previously identified Aramark supporting two in-progress Google data center construction projects in Texas, providing insulation from any potential construction moratorium.
The firm’s updated financial model projects data center construction growing from approximately 1% of revenue in fiscal fourth quarter 2026 to roughly 5% by fiscal year 2029. The primary risk relates more to the out-year growth story and investor sentiment rather than near-term financial results. Truist’s model does not assume material fiscal year 2027 contribution from yet-to-start Texas data center projects.
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