Brad Jacobs, the Chairman and CEO of QXO, spent nearly one hour discussing why he believes the building distribution industry contains so much earning potential, his views on future acquisitions by QXO, and the use of AI during a session at The Economic Club of New York.
Jacobs says he believes the construction industry is one of the few that will not face disruption in the near future. “I like the characteristics of the industry. I think it’s a safe bet that building products is not going into the metaverse five years from now or 10 years from now,” Jacobs told the audience. “You’re still going to go home to a real physical house, with a roof and windows and doors and bathtub. I don’t think that’s going away, and I think over time because of the shortage of housing and the age of all the commercial and residential buildings, we’re going to see a lot of repair and modeling. I think it’s going to be a lot of new construction over time. It’ll be cycles over time.”
When asked about acquisitions, Jacobs believes there are so many distributors throughout the construction industry that he needs to keep his focus on the correct opportunities. Earlier in 2025, Jacobs and QXO purchased Beacon Roofing, the largest publicly traded roofing supply company in the United States, for $11 billion. It’s part of QXO’s plan to have $50 billion in construction industry distribution. Jacob told the crowd in New York that he likes seeing so many distributors in the industry. “I like the fact that it’s fragmented. It’s like 20,000 distributors,” Jacobs explained. “I don’t want all of them. I actually don’t have to buy a lot of them. I have to buy one or two a year of large size.
“Beacon was an $11 billion deal that was a great deal. I liked it a lot. It was the perfect deal for us but there’s others, too. The goal is to get to $50 billion in revenue. That’s the next mountain top we’re going to climb. We’ll climb another mountain top after that, but the first top is $50 billion. In order to do that, I have to buy $30-$40 billion and organically grow it through price, volume, and through market share up to the $50 billion. With the $9 or $10 billion we already bought we’re one-quarter to one-third there already. We don’t have to do a zillion good deals. We have to do deals that are reasonably priced, not really low priced, but definitely not overpriced. It’s the number one mistake that acquirers make. They fall in love with the deal and they pay some ridiculous price.”
Jacobs weighed in on strategies by Lowe’s and Home Depot to acquire distribution outlets in the construction industry. He expects Lowe’s to pause for a while, but is keeping his eye on Home Depot’s next strategic moves.
“(Lowe’s CEO Marvin Ellison) said on the earnings call last week that they’re gonna take a pause for probably a couple of years before doing any more big deals, and they’re going to integrate what they’ve got,” Jacobs said. “I respect that. I’ve been there myself. We did 18 deals at XPO from 2011 to 2016, and we stopped. We didn’t do any positions for several years to be integrated. We said, ‘Look, this is what we got, a huge opportunity here to improve the business to integrate it, to optimize it, to grow out all the technology, to get an integrated global organization’, and we doubled it. I respect that. So they’re gonna probably [wait] for a couple of years.
“Home Depot, I don’t know. Home Depot has got to figure out if this is the right strategy. It is a fantastic, iconic retailer, and as a fantastic retailer do they really want to be in distribution? Is this something that is accretive for them to earnings? I don’t know. Is this something that they know how to integrate? I don’t know what they’re going to do, but even if they are a competitor for the pro customer, which is just one segment of everything, we’re looking at that. They’ll beat us (on acquisitions) because they pay much more than we pay.”
On the subject of AI, Jacobs isn’t shy about the future.
“I think every single industry will be completely disrupted, including building products distribution. I think every single industry will be AI generated, and the humans won’t add much value,” Jacobs said. “It’s like ‘why should we do it if the system can do it more efficiently than we mere humans can do. Let it do it as long as there’s guardrails on it, and let’s enjoy life and just have fun. You don’t need to hire more salespeople, and that gets to the worry about jobs. Well, we actually are hiring more sales people. We’ve hired another 50 or 100 that we’re setting up with the call center. We’ve hired another equal amount to be hunters. To go out get new business, find more business for the company.
“Long term, I don’t think I’m going to have a job. I think everything I do will be reduced to information data algorithms and done better than I do right now. It will have the experience and the judgment that’s much, much better than mine. It’s not a long period of time where AI will be not only smarter than any person, but smarter than all of the people put together. If you go out to San Francisco and talk to tech people, everybody agrees on that. Nobody disagrees with that. AI’s will be smarter than any person, and then in a few years after that, smarter than everybody combined. If we use that for good, if we use that for positive humanity, i mean our kids and grandkids will have long, healthy lives with all kinds of creativity and emotional fulfillment and the arts will flourish.”
Tagged with acquisition, Biggest News, QXO
I understand that AI will replace much of the way business is done in the future.. as it concerns may aspects of business, however, can AI actually, physically build a building… can AI replace Electricians, Plumbers, Carpenters, HVAC installers ?
People will still need to interact, at times, with people !!