The sheer size of investment in data centers is drawing concern as it surpasses all other historical booms and crowds out other more job-creating ventures. 

Until now, no industry had driven the U.S. economy with such force since the railroad expansion of the late 1800s, when titans battled one another to lay the transcontinental tracks that would connect America from coast to coast.

Railroads in the 19th century consumed about $173 billion in today’s dollars and created more than 2% of the nation’s annual economic output (GDP) over 20 years. 

Today’s data center buildout will dwarf that amount, with $10 trillion in investment, and now have almost twice the economic impact — nearly 4% of GDP. That’s according to a report created by a Columbia Business School professor, Stijn Van Nieuwerburgh.

States are starting to feel left out of the windfall, many having granted tax exemptions before the boom. 

Years ago, before artificial intelligence prompted a tsunami of building, states typically welcomed data centers supporting internet traffic, offering tax abatements and other perks. Many officials now are rethinking that approach as tax revenues take a bigger hit and high energy demands take a toll on affordability. 

Nevada, for instance, trimmed tax abatements and will ask data centers to agree to foot the bill for energy and water demands, in a September executive order from Republican Gov. Joe Lombardo. 

States where data center costs will be concentrated over the three years are Texas ($638 billion), Virginia ($249 billion), Ohio ($169 billion) and Georgia ($160 billion), according to projections from Industrial Info Resources, a market intelligence firm.   

Southern states dominate the landscape for the number of data centers planned, with large numbers also proposed in Arizona, California, Florida, Indiana, Iowa, Indiana, North Carolina, Oregon, Pennsylvania and Washington state, according to a Pew Research Center report in April. 

The profitability of AI has yet to catch up with the expense of the buildout.

“It is not a pretty picture right now,” said IIR’s senior vice president of research, David Pickering. “I think it will become profitable once things settle down a bit and more legislation is put in place to regulate how we handle AI. 

“The big players will no doubt find a way to make it profitable,” he said.  

There are signs the staggering cost of data centers is crowding out other investments such as housing. 

Over the past two years new construction value for data centers has more than doubled to $85 billion annually, while all other construction value has dropped 8%, according to a Stateline analysis of U.S. Census Bureau data as of August.

As new data center value grew by $48 billion since 2024, new houses and apartments dropped by $29 billion, according to the data.

Adam Shapiro, a vice president at the Federal Reserve Bank of San Francisco, noted the change in a September social media post: “We’re seeing a pivotal shift in the US economy: investment is shifting away from residential investment and towards computers.” 

Some, like the economist Paul Krugman, see the shift as hurting employment in the long run, despite more current hiring for construction workers. 

“Because data centers employ so few workers, the vast spending on AI currently taking place will also significantly reduce the demand for labor,” Krugman wrote in an Oct. 11 analysis.

Josh Bivens, chief economist for the left-leaning Economic Policy Institute, agreed that the economy’s recent dependence on data centers and other AI spending is unhealthy, calling it “a narrow base of growth, basically one sector, and a pretty fragile one.” 

“Anything that upsets expectations about the future potential profitability of AI investments will likely lead to pretty sharp cutbacks,” Bivens said. “I’m uneasy about how durable this strength might turn out to be.”

As for the historic nature of the buildout, Mark Higgins, author of a book on U.S. financial history, said there are parallels to the age of railroad building in the late 19th century.  

“Railroads were a huge investment,” Higgins said. “In the 1800’s most of the capital was foreign, and it would attract all this money from Europe, then everything would crash — there were several panics —and Americans would buy the distressed railroads and profit, because they knew which were the good ones.” 

Railroad construction, which did not include trains themselves, cost $4.3 billion between 1870 and 1890, about $173 billion in today’s dollars, according to historical figures provided to Stateline by Van Nieuwerburgh and adjusted for inflation.

Other large-scale construction booms consumed only about 1% or less of annual GDP: Canals in the early 19th century, electrification in the early 20th century, highways in the mid- to late-20th century, and telecoms and fiber between 1996 and 2003.

In a report this month the International Monetary Fund warned of the risk of lower stock prices if high expectations for AI fail to materialize. 

“Although core firms in the AI ecosystem have been profitable so far … weaker or less durable investment and profitability in AI could trigger a correction,” the report warned.

The buildout will also double electricity consumption, Van Nieuwerburgh estimated, a continual thorn for data center projects that need more power to process vast data troves to power AI applications. 

An Oregon report last month, which led to a continued freeze on data center approvals in the state, said the single most frequent concern in public comments is utility affordability.

An analysis from two universities in July found that the combination of data centers and cryptocurrency mining could raise electricity bills by 8% nationally, and as much as 25% in parts of Virginia. The report came from a collaboration between Carnegie Mellon University in Pennsylvania and North Carolina State University. 

Virginia passed an electricity consumption surcharge specifically for data centers that began in July, in a budget compromise that preserved lucrative tax breaks for the data centers. Some localities with heavy concentrations are considering pauses, and at least one city has a moratorium.

Stateline reporter Tim Henderson can be reached at thenderson@stateline.org.

MACON, Ga. — Blue Bird Corporation (“Blue Bird”) (Nasdaq: BLBD), the leader in electric and low-emission school buses, announced today its fiscal 2026 third quarter financial results.

“I am incredibly proud of our team in delivering another outstanding quarterly result,” said John Wyskiel, President & CEO of Blue Bird Corporation. “The Blue Bird team continued to exceed expectations, improving operations, navigating tariffs, and expanding our leadership in alternative-powered buses. We delivered an exceptional Adj. EBITDA of $71M for the third fiscal quarter of 2026, including consolidated results from our recent Micro Bird acquisition.

“In our push to expand our leadership in alternative-powered school buses, we delivered 355 electric-powered buses this quarter. As of the end of the quarter, we had more than 770 EV buses in our firm order backlog, which supports our EV sales target for 2026.

“Additionally, we just announced a major collaboration agreement with Ford Motor Company to design, manufacture and sell the next generation F53/59 commercial stripped chassis. Blue Bird will integrate Ford’s next generation medium-duty gas powertrain into this new stripped chassis. As part of this arrangement, Blue Bird will also purchase the assets of Detroit Chassis LLC’s Detroit Plant. Detroit Chassis is the assembler of the current F53/59 stripped chassis. This transaction is anticipated to close early 2027, shortly after the current chassis ends production. Production of the next generation stripped chassis is planned to begin early 2028. This move is a significant component of our Long-Term Strategy, and will position us to be a growing player in the specialty vehicle/chassis market.”

FY2026 Guidance and Long-Term Outlook

“We are very pleased with our third quarter results, driven by excellent Blue Bird results as well as the integration of Micro Bird,” said Razvan Radulescu, CFO of Blue Bird Corporation. “Our business is in a very strong position and we continue to deliver ahead of the plan we have been messaging. With the record first nine months we have delivered, we are raising our full-year 2026 Adj. EBITDA guidance.

“The updated 2026 Guidance is Net Revenue at ~$1.75 Billion and Adj. EBITDA to ~$247 million. Additionally, we are raising our long-term profit outlook to include the recent announcement of our expanded Ford collaboration and purchase of Detroit Assembly Plant’s assets, towards a 2030+ long-term Adjusted EBITDA of $500+ million, or 15%+, on $3.3 billion in revenue. We are confident in our profitable growth plans.”

Fiscal 2026 Third Quarter Results

Net Sales

Net sales were $517.2 million for the third quarter of fiscal 2026, an increase of $119.1 million, or 29.9%, compared to $398.0 million for the third quarter of fiscal 2025. Micro Bird contributed $122.9 million of net sales during the third quarter of fiscal 2026. The $3.8 million, or 1.0%, decrease in net sales for the legacy Blue Bird operations is primarily due to a 7.2% decrease in units sold resulting from timing due to a customer mix change as we produced a large number of units for certain customers that we will recognize as revenue in the fourth quarter of fiscal 2026 when the units are delivered to coincide with school resuming. Many of these units contributed to the significant increase in finished goods inventory at June 27, 2026. However, the decrease resulting from selling fewer units was partially offset by Bus customer and product mix changes and cumulative Bus price increases, including increases that were intended to mitigate the impact of increased procurement costs for certain of our imported inventory as a result of the imposition of tariffs beginning during the second half of fiscal 2025 and continuing into the first three quarters of fiscal 2026.

Bus sales increased $119.5 million, or 32.1%, for the third quarter of fiscal 2026 compared to the third quarter of fiscal 2025, which included the $122.9 million of net sales that Micro Bird contributed during the third quarter of fiscal 2026. Bus sales for the legacy Blue Bird operations decreased $3.5 million, or 0.9%, reflecting a 7.2% decrease in unit bookings that was partially offset by a 6.7% increase in average sales price per unit. In the third quarter of fiscal 2026, 2,290 legacy Blue Bird units booked compared to 2,467 units that booked during the same period in fiscal 2025. The increase in legacy Blue Bird unit price for the third quarter of fiscal 2026 compared to the same period in fiscal 2025 was primarily due to customer and product mix changes as well as price increases implemented to offset increases in inventory costs.

Parts sales decreased $0.3 million, or 1.2%, for the third quarter of fiscal 2026 compared to the third quarter of fiscal 2025. This small decrease is primarily attributed to slight variations due to product and channel mix that slightly exceeded price increases that were implemented to offset increases in inventory costs.

Gross Profit

Third quarter gross profit of $103.4 million represented an increase of $17.4 million from the third quarter of last year. The increase is primarily attributed to the acquisition of Micro Bird, which contributed $17.3 million of gross profit during the third quarter of fiscal 2026.

Net Income

Net income was $185.3 million for the third quarter of fiscal 2026, an increase of $148.8 million from the third quarter of last year. Micro Bird contributed $7.4 million of net income during the third quarter of fiscal 2026. Among other smaller fluctuations, the increase in net income for legacy Blue Bird operations was largely driven by an increase of $136.8 million in other income (expense), net, which primarily consists of $4.5 million of pretax costs relating to the acquisition of the remaining 50% of the outstanding voting common stock of Micro Bird effective April 1, 2026 and a $160.5 million gain during the third quarter of fiscal 2026 resulting from remeasuring the value of the previously held 50% equity investment to its acquisition date fair value in connection with the Micro Bird acquisition, which was partially offset by a $19.6 million loss resulting from the settlement of the pension benefits earned by the majority of pension plan participants. Neither of these had corresponding gains/losses during the third quarter of fiscal 2025.

Adjusted Net Income

Adjusted net income of $45.0 million represented an increase of $6.3 million from the third quarter of last year. The increase was primarily driven by $148.8 million increase in Net Income, discussed above, when adjusting for the impact of certain expenses and gains that are excluded in calculating Adjusted Net Income, including share-based compensation, Micro Bird acquisition costs, gain from Micro Bird Acquisition, and pension plan settlement loss, discussed above.

Adjusted EBITDA

Adjusted EBITDA was $71.4 million, which was an increase of $12.9 million compared with the third quarter of fiscal 2025. Micro Bird contributed $16.5 million of Adjusted EBITDA during the third quarter of fiscal 2026. The $3.6 million decrease in Adjusted EBITDA for the legacy Blue Bird operations primarily relates to the (i) $1.2 million increase in equity in net loss of non-consolidated affiliates and (ii) $3.0 million decrease in Micro Bird total interest expense, net; income tax expense or benefit; depreciation expense and amortization expense that is included in calculating Adjusted EBITDA, both during the third quarter of fiscal 2026 when compared with corresponding period in fiscal 2025.

Year-to-Date Fiscal 2026 Results

Net Sales

Net sales were $1,202.9 million for the nine months ended June 27, 2026, an increase of $132.1 million, or 12.3%, compared to $1,070.7 million for the nine months ended June 28, 2025. Micro Bird contributed $122.9 million of net sales during the nine months ended June 27, 2026. The $9.2 million, or 0.9%, increase in net sales for the legacy Blue Bird operations is primarily due to Bus customer and product mix changes and cumulative Bus price increases, including increases that were intended to mitigate the impact of increased procurement costs for certain of our imported inventory as a result of the imposition of tariffs beginning during the second half of fiscal 2025 and continuing into the first three quarters of fiscal 2026. The legacy Blue Bird Bus increases described above were partially offset by a decrease in Bus units sold resulting from timing due to a customer mix change as we produced a large number of units for certain customers that we will recognize as revenue in the fourth quarter of fiscal 2026 when the units are delivered to coincide with school resuming. Many of these units contributed to the significant increase in finished goods inventory at June 27, 2026.

Bus sales increased $131.3 million, or 13.2%, for the nine months ended June 27, 2026 compared to the nine months ended June 28, 2025, which included the $122.9 million of net sales that Micro Bird contributed during the nine months ended June 27, 2026. Bus sales for the legacy Blue Bird operations increased $8.4 million, or 0.8%, reflecting a 5.7% increase in average sales price per unit that was partially offset by a 4.6% decrease in units booked. The increase in unit price for the first nine months of fiscal 2026 compared to the same period in fiscal 2025 was primarily due to customer and product mix changes as well as price increases implemented to offset increases in inventory costs. This increase was partially offset by the impact of booking 6,573 units in the nine months ended June 27, 2026 compared with 6,892 units during the same period in fiscal 2025.

Parts sales increased $0.8 million, or 1.0%, for the nine months ended June 27, 2026 compared to the nine months ended June 28, 2025. This increase is primarily attributed to price increases that were implemented to offset increases in inventory costs as well as higher fulfillment volumes and slight variations due to product and channel mix.

Gross Profit

Gross profit for the nine months ended June 27, 2026 was $245.3 million, an increase of $28.2 million compared with the same period in the prior year. Micro Bird contributed $17.3 million of gross profit during the nine months ended June 27, 2026. Gross profit for legacy Blue Bird operations was primarily driven by the $9.2 million increase in net sales.

Net Income

Net income was $245.3 million for the nine months ended June 27, 2026, which was a $154.1 million increase from the same period in the prior year. Micro Bird contributed $7.4 million of net income during the nine months ended June 27, 2026. Among other smaller fluctuations, the increase in net income for legacy Blue Bird operations was largely driven by an increase of $130.4 million in other income (expense), net, which primarily consists of $7.2 million of pretax costs relating to the acquisition of the remaining 50% of the outstanding voting common stock of Micro Bird effective April 1, 2026 and a $160.5 million gain during the third quarter of fiscal 2026 resulting from remeasuring the value of the previously held 50% equity investment to its acquisition date fair value in connection with the Micro Bird acquisition, which was partially offset by a $19.6 million loss resulting from the settlement of the pension benefits earned by the majority of pension plan participants. Neither of these had corresponding gains/losses during the nine months ended June 28, 2025.

Adjusted Net Income

Adjusted net income for the nine months ended June 27, 2026 was $110.0 million, an increase of $9.2 million compared with the same period last year, primarily due to the $154.1 million increase in net income, discussed above, when adjusting for the impact of certain expenses and gains that are excluded in calculating Adjusted Net Income, including share-based compensation, Micro Bird acquisition costs, gain from Micro Bird Acquisition, and pension plan settlement loss, discussed above.

Adjusted EBITDA

Adjusted EBITDA was $172.3 million for the nine months ended June 27, 2026, an increase of $18.8 million compared with the same period in the prior year. Micro Bird contributed $16.5 million of Adjusted EBITDA during the nine months ended June 27, 2026. The $2.3 million increase in Adjusted EBITDA for the legacy Blue Bird operations primarily relates to the $11.7 million increase in gross profit, when adjusted for the impact of expenses that are excluded in calculating Adjusted EBITDA, as outlined in the revenue and cost of goods sold discussions above, that was partially offset by the (i) $6.4 million increase in selling, general and administrative expenses, when adjusting for the impact of expenses that are excluded in calculating Adjusted EBITDA, and (ii) $3.4 million decrease in other income, net, when adjusted for the impact of income and expense amounts that are excluded in calculating Adjusted EBITDA as discussed above, all during the nine months ended June 27, 2026 compared to the nine months ended June 28, 2025.

About Blue Bird Corporation

Blue Bird (NASDAQ: BLBD) is recognized as a technology leader and innovator of school buses since its founding in 1927. Our dedicated team members design, engineer and manufacture school buses with a singular focus on safety, reliability, and durability. School buses carry the most precious cargo in the world – 25 million children twice a day – making them the most trusted mode of student transportation. The company is the proven leader in low- and zero-emission school buses with more than 25,000 propane, natural gas, and electric powered buses sold. Blue Bird is transforming the student transportation industry through cleaner energy solutions. For more information on Blue Bird’s complete product and service portfolio, visit www.blue-bird.com.

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TORONTO, ONTARIO, Canada – As a company dedicated to giving back to its communities, Stock Transportation’s Toronto West team had the very special opportunity to provide in-kind transportation for The Salvation Army St. Catharines’ summer camp. The summer camp provides local children with the opportunity to experience a week full of recreation, friendship, and personal growth.

For the summer camp, Stock Transportation donated a bus and driver to transport a total of 40 children to and from Jackson’s Point Camp and Newport Adventure Camp where they participated in various activities such as team-building exercises, music, crafts, and recreational activities designed to encourage growth, friendship, and confidence. The Salvation Army St. Catharines Ministry covers the cost of the summer camp program for local children every year – giving the opportunity to children who may not otherwise have been able to attend. Thanks to the efforts of our team and the Salvation Army, this group of wonderful youth were able to enjoy an incredible summer experience to remember.

To thank our team, Rose Amer, Director at The Salvation Army St. Catharines Community & Family Services, shared a letter, in which she wrote the following:

“On behalf of The Salvation Army St. Catharines Community & Family Services, I would like to express our sincere gratitude to the entire team at Stock Transportation for their extraordinary generosity in providing complimentary transportation for our children attending summer camp at Jackson’s Point. Your willingness to donate a school bus and driver has helped make it possible for 40 children from our community to enjoy a life-changing week of camp. Many of these children come from families facing financial hardship and would not otherwise have the opportunity to participate in this experience.

We are especially grateful for the professionalism, care, and attention demonstrated throughout the planning process. Your partnership reflects a genuine commitment to supporting children and strengthening communities, and we are deeply thankful for your investment in the lives of the young people we serve. It is encouraging to know that organizations like Stock Transportation share our desire to make a positive difference in the lives of children and families.”

Stock Transportation prides itself as being more than just a student transportation provider. Its teams are also community partners who are dedicated to giving back to the communities they serve through opportunities like this. Every year, they aim to donate in-kind transportation services, host clothing drives, and provide buses for community donation efforts, like the Toronto Blue Jays’ Annual Stuff the Bus campaign which Stock Transportation will proudly support once again next month in August.

“It was truly an honor to be able to support the Salvation Army and help make it possible for children to attend an overnight camp experience. We know how meaningful these opportunities can be, and we’re proud to play a small part in creating lasting memories for kids who may not otherwise have the chance,” said Renee Gough, General Manager, Stock Transportation. “Planning the donation involved coordinating schedules, ensuring a safe and reliable bus was available, and working closely with the Salvation Army to meet their transportation needs. It was a team effort and seeing it all come together made it incredibly rewarding. At the end of the day, it’s about the kids. Knowing that something as simple as providing transportation can help create lifelong memories for them is incredibly rewarding. We’re thankful to be in a position to give back to our community in a meaningful way.”

About Stock Transportation
As a premier transportation provider, Stock Transportation provides safe, reliable student transportation that communities trust and families depend on. With operational discipline, local commitment, proven safety standards, and clear accountability, we bring deep expertise to every route we operate. Driven by our five values: Safety, Care, Transparency, Communities, and Culture, we deliver transportation that works quietly, consistently, and without disruption.

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