Snowcap short Sterling Infrastructure, sees 60-80% downside

Snowcap is short Sterling Infrastructure (STRL), which it calls “a poster child for the AI bubble in public markets.” According to a recently published report, “Data center exposure appears exaggerated. Backlog growth is not supported by contract win data pulled from a third-party publication. Worse, margins appear grossly inflated through abnormal accounting revisions, corroborating overstated DC exposure. Sterling’s valuation is so exuberant that it now looks expensive even compared to AI darlings.” Snowcap further says, “Ultimately, we believe Sterling is a regional contractor dressed up in an AI veneer, trading at a valuation that assumes it is something it is not. The stock is acutely vulnerable as the narrative fades and fundamentals reassert themselves.” It sees 60%-80% downside from current levels.