Here’s Why This Hidden AI Stock Rose 155% in the First Half of 2026

Argan (AGX 5.75%) stock rose an incredible 154.9% in the first half of 2026, according to data from S&P Global Market Intelligence. It’s a great run driven by the company’s importance in the electrification trend in the economy, ultimately led by investment in AI data centers. Here’s what makes the company a critical part of the electrification and how you can get an early read on its growth prospects.

Argan and electrification

The company is an engineering, procurement, and construction (EPC) services provider in the power, industrial, and teledata sectors. With revenue mix components of 80%, 18%, and 2% of total revenues, respectively, in fiscal 2026, it’s clear that its power business is the driver of its earnings and valuations.

The power business provides EPC services to power producers, electric utilities, and “power plant equipment suppliers and other commercial firms with significant power requirements,” according to its 10-K filing with the Securities and Exchange Commission (SEC). While most of the excitement and marginal improvement in its backlog ultimately comes from the insatiable demand for power from AI data centers, it’s important to remember that Argan also benefits from other strong trends in the electrification theme, including the electrification of transportation (electric vehicles and charging networks), buildings, and infrastructure. In addition, there’s an ongoing need to maintain aging electrical infrastructure.

The startling increase in backlog this demand creates is shown below. For context, consider that Argan’s revenue in fiscal 2026 was just $945 million; its current backlog of $2.8 billion is almost three times that.

As for the increase in the share price this year, it largely reflects rising market expectations and planned hyperscaler AI spending throughout the year. This has helped dispel the notion that AI and the electrification trend it’s part of were in a bubble heading into 2026.

Where next for Argan?

The question then turns to how sustainable the backlog growth is. Speaking on the last earnings call, CEO David Watson said, “As I discussed on our last call, we expect to add a handful of new projects over the next 10 to 18 months,” and emphasized a “disciplined approach” to selecting projects. This is exactly the sort of language investors need to hear, because history is littered with contractors who overstretched themselves chasing unsuitable contracts with questionable margins during boom times.

One way to get a sneak peek at Argan’s potential backlog growth is to monitor the equipment backlogs of major power equipment companies that install its technology, including GE Vernova, Siemens Energy, and Mitsubishi Power.

The good news is that GE Vernova, the largest gas turbine equipment company, continues to report strong growth in equipment orders and backlog in 2026 and will hopefully report the same in its second-quarter earnings report on July 22. A date for Argan investors to watch.