Energy Play Argan Sees Major Opportunities Beyond AI, Data Centers

Blockhead12-20 21:00

Energy infrastructure provider Argan has powered to record highs amid the artificial intelligence boom, which is driving massive demand for data centers. Experts now see energy requirements continuing...

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Experts now see energy requirements continuing...</p>\n\n<a href=\"https://www.investors.com/research/the-new-america/argan-agx-stock-energy-infrastructure-ai-data-center-growth-power-grid-upgrade/\">Source Link</a>\n\n</div>\n","source":"investor_business_daily_highlight","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Energy Play Argan Sees Major Opportunities Beyond AI, Data Centers</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nEnergy Play Argan Sees Major Opportunities Beyond AI, Data Centers\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-12-20 21:00 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.investors.com/research/the-new-america/argan-agx-stock-energy-infrastructure-ai-data-center-growth-power-grid-upgrade/><strong>Blockhead</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Energy infrastructure provider Argan has powered to record highs amid the artificial intelligence boom, which is driving massive demand for data centers. Experts now see energy requirements continuing...</p>\n\n<a href=\"https://www.investors.com/research/the-new-america/argan-agx-stock-energy-infrastructure-ai-data-center-growth-power-grid-upgrade/\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"GEV.AU","symbol_name":"Global Energy Ventures","start_time":0,"source_url":"https://www.investors.com/research/the-new-america/argan-agx-stock-energy-infrastructure-ai-data-center-growth-power-grid-upgrade/","article_id":"2492444819","we_media_id":null,"thumbnails":["https://www.investors.com/wp-content/uploads/2024/12/NEWAM_build_122024_shutter-150x150.jpg"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2492444819","pubTimestamp":1734699644,"columns":[],"sourceInfo":{"source_id":"investor_business_daily_highlight","name":"Investor’s Business Daily"},"weMediaInfo":null,"summary":"Argan has tripled this year as the AI boom fueled massive gains. Energy demand will continue to grow, and the power grid offers an opportunity.","collect":0,"end_time":0,"defaultTopTitle":"investors.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"GEV.AU":"Global Energy Ventures","LU1978683503.SGD":"Blackrock Sustainable Energy A2 SGD-H","AGX":"Argan Inc.","LU1303367103.USD":"摩根大通多经理另类基金 A (acc)","LU1093756168.USD":"FRANKLIN K2 ALTERNATIVE STRATEGIES \"A\" (USD) ACC","BK4178":"家庭装饰零售","BK4129":"建筑与工程","LU2098885051.SGD":"JPMorgan Funds - Multi-Manager Alternatives A (acc) SGD","BK4585":"ETF&股票定投概念","BK7072":"石油与天然气的储存和运输","LU2298322129.HKD":"BGF SUSTAINABLE ENERGY \"A2\" (HKDHDG) ACC","LU1988902786.USD":"FULLERTON LUX FUNDS GLOBAL ABSOLUTE ALPHA \"I\" (USD) ACC","LU1093756325.SGD":"FTIF - Franklin K2 Alt Strat Fd A (acc) SGD-H1","LU0724618433.USD":"BGF NEW ENERGY \"A4\" (USD) INC","LYY.SI":"中云集团","BK4588":"碎股","LU0124384867.USD":"贝莱德新能源基金A2","LU2264538146.SGD":"Fullerton Lux Funds - Global Absolute Alpha A Acc SGD","BK6051":"信息科技咨询与其它服务","GEV":"GE Vernova Inc.","LU1064131342.USD":"Fullerton Lux Funds - Global Absolute Alpha A Acc USD","BK4182":"重型电气设备"},"translate_title":"Energy Play Argan看到了人工智能和数据中心之外的重大机遇","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"LYY.SI":1,"GEV":1,"GEV.AU":1,"AGX":1},"content_text":"Energy infrastructure provider Argan has powered to record highs amid the artificial intelligence boom, which is driving massive demand for data centers. Experts now see energy requirements continuing to increase — as power grids are considered to be in dire need of modernization — leading to plenty of AI growth opportunities for an energy stock like Argan.\n\n\n\n↑\nX\n\n\n\n\nAI's Next Frontier: The Tech Set To Dominate CES 2025\n\n\nSee All Videos\n\n\n\n\nNOW PLAYING\nAI's Next Frontier: The Tech Set To Dominate CES 2025\n\n\n\n\nArgan (AGX) stock has tripled this year as the AI wave boosted tech, chip, data center and energy firms.\nThe company recently reported a 400% increase in earnings for its 2025 fiscal third quarter to $2 per share. Sales jumped 57% to $257 million. The results marked Argan's fourth straight earnings beat, while revenue topped expectations for the sixth quarter in a row.\nChief Executive David Watson told Investor's Business Daily that the larger macro tailwinds for the industry have been significant.\n\"It's demand for high-quality, reliable, 24/7 energy to fuel data centers, reshoring complex and energy-intensive manufacturing operations and EV (electric vehicle) charging that will continue to grow,\" Watson said. \"It's creating demand for energy facilities needed to support the power grids.\"\nBusiness Overview\nThe Rockville, Md.-based company provides traditional and renewable power infrastructure and services across nearly the entire energy industry. Argan is divided into three business segments — power industry services, industrial construction services, and telecommunications and infrastructure.\nArgan's power services, comprising Atlantic Projects Company and Gemma Power Systems, made up almost 73% of sales in fiscal 2024, according to FactSet. The segment includes engineering, construction, development and consulting services for the likes of energy facilities and data centers. It offers low-carbon and zero-carbon fuels, such as solar facilities, wind farms, biomass projects, gas-fired power plants, battery and waste-to-energy facilities.\nIndustrial construction, represented by its TRC subsidiary, provides contracting, shutdown, mobilization and piping installation services. The segment has various pulp and paper, petrochemical, biopharmaceutical, fertilizer, energy storage and manufacturing customers, and accounted for roughly 25% of sales in fiscal 2024, which ended in January.\nTelecommunications and infrastructure, Argan's smallest segment at about 2.5% of sales, provides line installation and cable structuring as well as other services.\nWatson noted that its renewables business has seen significant growth this year while the industrial segment has also had a \"very strong year\" as Argan continues to diversify its revenue streams.\nEnergy Stock: Growing Needs\nArtificial intelligence — and the data centers powerful enough to allow the AI programs to \"train\" themselves — are also playing into Argan's business plan. These systems require massive amounts of power, and contractors to get it to them.\nThe Department of Energy reported that AI data centers use 10 to 50 times the energy of a commercial office building. And Goldman Sachs forecasts AI will boost data-center power demand 160% by 2030. By 2028, AI could represent 19% of data-center power demand.\nMcKinsey & Co. has a slightly more conservative outlook, estimating that U.S. data center energy demand will represent 11% to 12% of the total power demand by 2030, up from around 4% currently.\nWatson said he expects continued renewables growth, but there are some questions around government support for the Inflation Reduction Act with the incoming administration of President-elect Donald Trump.\nIt's currently unclear which direction Trump's administration will take. But he campaigned on themes of reduced regulation, as well as voiced support for traditional fuel sources like oil, gas and coal. Argan says it is prepared for either scenario.\n\"We do an all-the-above approach,\" Watson told IBD. \"If there is a bit of a slowdown in the renewables segment, it's clearly going to be offset by an increase in the gas segment.\"\nIdeally, both traditional and renewable projects will continue to grow, Watson said.\nAnd regardless of government regulatory action, or a lack thereof, industry growth should continue to accelerate due to AI, data centers and the increase in U.S. GDP, Watson noted.\n\"We're not seeing a slowdown in our opportunities,\" he added.\n\nAI Is Fueling A 'Nuclear Renaissance.' Bill Gates And Jeff Bezos Are In The Mix.\n\nPower Grid Overhaul\nBut beyond rising energy demand, the industry faces another major test — the aging power grid. Like most of America's infrastructure, the grid is in need of a major update. And that's where an energy stock like Argan would come in.\nWatson noted that about 20% of the U.S. grid runs on coal-fired and 40% on gas-fired generating assets. Of gas-fired assets, a significant portion were built in the early 2000s, while coal assets are antiquated as well.\n\n\"If you take those two segments together, you're talking about 40-plus percent of the grid that's on borrowed time,\" Watson said. Some upgrades are underway \"here and there\" to extend the life cycles of certain grid assets, he added.\n\"We are going from a transformative moment where we haven't seen energy demand growth in 20 years, to (where) we now have energy demand growth that could be significant,\" Watson said. \"But we still need to replace a lot of legacy assets that are end-of-life.\"\nHe noted that conversations have already begun among grid operators. Some in Texas are raising serious concerns about grid reliability over the next five-plus years. Meanwhile, the supply chain for the space has atrophied in recent years due to underinvestment.\nHe mentioned that there are gas turbine shortages, which major players like GE Vernova (GEV) and Mitsubishi are working to address. But those challenges should right itself in the near to midterm, Watson said.\nAnother challenge is building out new transmission lines that interconnect power plants and data centers to the grid. But there are some workarounds and behind-the-meter opportunities to mitigate some of those headwinds, Watson added.\nStill, Argan has a role to play in upgrading power plants and grid connectivity. Further, that means the company should see \"significant growth\" across its businesses.\nArgan Backlog Strategy\nArgan reported that its third-quarter backlog rose 6% year-over-year to $800 million. That's down slightly from its recent second-quarter peak, which was around $1 billion.\n\"We're only as good as our current project and getting repeat customers is essential and critical to our growth and success over the years,\" Watson said. He said Argan prefers to focus on \"the bird in hand\" and executing projects in the pipeline on time and within budget.\nArgan still has a number of projects that it is evaluating or expects to win. These also should add \"meaningful growth\" to its backlog, Watson says. The company's subsidiary Gemma Power Systems on Dec. 12 received approval for a 700-megawatt natural gas-fired power plant in the U.S.\nThat pushes the company's backlog \"significantly above\" $1 billion by the end of the year, holding all things equal, Watson told IBD. But Argan wants to be strategic about the projects it takes, he says.\n\"We're not just in the business of growing, we want to grow smartly,\" Watson said. \"You can't just take on 10 jobs tomorrow and expect to be able to execute all those positively and profitably. So we are going to be very purposeful about what we take on and what projects we select.\"\nArgan will also continue to invest in its people and grow its capacity, Watson added.\nThe View From Energy Stock Analysts\nAnalysts polled by FactSet expect Argan to report a 35% increase in adjusted earnings. That means $1.20 per share for the fourth quarter. Further, they see 20% revenue growth to $197.5 million.\nAnalysts also predict 2025 earnings more than doubling to $5.06 per share, from $2.39 per share in 2024. Revenue is expected to reach $839.2 million, up from $573.3 million for the 2024 fiscal year.\nFor 2026, FactSet estimates earnings to grow to $5.35 per share on $897.1 million in sales. By 2028, earnings are expected to reach $9.44 per share on $1.2 billion in revenue.\nLake Street analyst Robert Brown recently said he expects multiple new large contract wins and a significant ramp-up in revenue over the next several years, according to a research note reported by The Fly. However, Brown believes that Argan shares \"fully reflect the opportunity\" in the current strong environment.\nLake Street lowered its rating on the energy stock to hold from buy. But the firm hoisted its price target to 150 from 85.\nArgan Stock Action\nArgan stock has rallied about 215% this year, with gains accelerating after the company's third-quarter results in September. Shares hit a record high of 165.33 on Nov. 27, but have eased during December.\nThe energy stock pulled back to test its 50-day moving average this week. It struggled to hold support above its 21-day exponential moving average to start December.\nArgan is a member of the IBD 50 list. It ranks first in the Building-Heavy Construction Group according to IBD Stock Checkup. The group has advanced 73% in 2024.\nArgan holds a best-possible Composite Rating of 99. The Composite Rating combines various technical indicators into one easy-to-read score. Shares have a 98 EPS Rating. Argan's relative strength line is near its 52-week highs from late November with a 98 RS Rating.\nYou can follow Harrison Miller for more stock news and updates on X/Twitter @IBD_Harrison\nYOU MAY ALSO LIKE:\nBest Growth Stocks To Buy And Watch: See Updates To IBD Stock Lists\nLooking For The Next Big Stock Market Winners? Start With These 3 Steps\nJoin IBD Live And Learn Top Chart Reading And Trading Techniques From Pros\nLearn How To Time The Market With IBD's ETF Market Strategy","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"1","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.3","shortVersion":"4.29.3","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2492444819"}