RBC Capital Markets retains a bullish outlook on Aecom (ACM), citing strong project backlog and infrastructure investment trends, while Baird & Co. warns of potential long-term revenue headwinds from AI adoption across construction workflows. The divergent views reflect growing uncertainty around technology's impact on traditional engineering firms.
- RBC maintains a buy rating on Aecom (ACM) with a $32 price target
- ACM’s contract backlog stands at $12.3 billion as of Q3 2025
- Baird warns AI could displace 25% of routine engineering tasks by 2030
- ACM's current AI adoption rate is 18%, with a target of 40% by 2027
- Key projects include Los Angeles Metro expansion and Houston flood mitigation system
- ACM shares showed minimal movement following divergent analyst outlooks
Aecom (ACM) is at the center of a developing debate among Wall Street analysts, as RBC Capital Markets reaffirms its outperform rating on the company, citing a robust $12.3 billion in contract backlog and increasing federal infrastructure spending in North America. RBC highlights ACM's strategic positioning in large-scale transit and environmental projects, noting that its diversified portfolio across water, transportation, and urban development provides resilience amid macroeconomic volatility. In contrast, Baird & Co. has issued a cautionary note, warning that the accelerated rollout of AI-driven design and project management tools could compress margins and reduce demand for traditional engineering services over the next five to seven years. The firm estimates that AI automation could displace up to 25% of routine engineering tasks by 2030, potentially impacting ACM’s revenue streams in design and feasibility studies. This shift, Baird argues, may force a restructuring of cost structures and service offerings to remain competitive. The market has responded cautiously, with ACM shares trading flat in early after-hours trading despite RBC’s bullish stance. Institutional investors are closely monitoring how ACM integrates emerging technologies, particularly in AI-assisted modeling and digital twin applications, which are already being piloted on major projects such as the Los Angeles Metro expansion and Houston’s flood mitigation system. Analysts estimate that ACM's current AI adoption rate stands at approximately 18% across its engineering divisions, with plans to scale to 40% by 2027. The divergence in outlook underscores the tension between near-term operational strength and long-term technological disruption. Infrastructure firms like ACM face a pivotal moment: leveraging AI to enhance efficiency while navigating the risk of commoditization of core services.