Data-center engineering company Argan reported better-than-expected fiscal third-quarter 2025 earnings and revenue late Thursday, with profit soaring 400% compared to a year earlier.
Argan announced fiscal third-quarter EPS of $2.00, a four-old leap compared to 40 cents a year ago, while sales increased 57% to $257 million. Before Thursday's release, analyst consensus had earnings coming in at $1.26 per share on $225.6 million in revenue.
The data center engineer also reported Thursday that its project backlog was $800 million at the end of the quarter, marking a 6% increase since the beginning of its fiscal year.
"We are encouraged by the strengthening pipeline of planned energy facilities as the industry prepares for the anticipated unprecedented growth in power demand driven by data centers, reshoring of manufacturing operations and increased EV charger utilization," Chief Executive David Watson said Thursday in the earnings release.
"Our successful track record as an effective partner in the construction of both traditional and renewable power facilities position us well to capitalize on the current and future need for high quality energy resources to support the power grid," Watson added.
Argan stock surged early before falling 1.1% to 147.16 market action on Friday. Heading into Friday's market open, AGX had pulled back 4.5% on the week and is trading below its all-time high of 165.33, which it hit on Nov. 27. AGX has a 218% gain year to date through Thursday, and is on the IBD 50 Growth Stocks To Watch.
AI Data Center Demand
Artificial intelligence — and the data centers powerful enough to allow the AI programs to "train" themselves — are expected to boost energy demand throughout this decade. In the U.S., McKinsey & Co. projects that data center energy demand will grow from around 4% currently, as a percentage of total energy demand, to 11%-12% by 2030.
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Many technology companies are investing in new data centers facilities and cutting deals with power providers to ensure energy supplies for their AI training.
Argan stock gained 73% after gapping up in September, when the energy industry provider reported fiscal 2025 second-quarter results (its fiscal year ends in January).
Demand from two high-growth industries — data centers that power artificial intelligence workloads and electric vehicles — helped the stock soar to its all-time high without once breaking its line of support at the 50-day moving average.
The data center engineering stock has a 98 Composite Rating out of a best-possible 99. AGX also has a 98 Relative Strength Rating and a 97 EPS Rating.
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