TRG | The Bottom Line – 6/20

This week saw two notable “hungry for more” stories develop across TRG’s universe, the increasing need for energy driven by industrial projects like data centers as well as distribution heavyweights QXO and HD both offering to acquire GMS. The demand for data centers, rise in industrial and manufacturing spend, and increased energy needs is not necessarily “new news.” What is new, however, is the magnitude of the increase only 1 year away. The EIA recently doubled the previously expected growth rate of electricity consumption in 2026, largely due to the increase in data centers, industrial production, and overall projected demand growth. We view this trend as directly beneficial for our non-res & public construction-focused coverage universe, a tailwind for the construction supply chain broadly, and a trend that is only gaining in momentum. QXO’s and HD’s acquisition offers to GMS is also a “hungry for more” play as Brad Jacobs continues to build out his distribution platform after acquiring BECN in April and HD continues to go after the Pro customer after acquiring SRS in 2024. Both of these stories will continue to play out over the coming years and are expected to have broad implications across the sector.