By MICHAEL LARKIN

While many people focused on Nvidia (NVDA) during the artificial intelligence boom, there were other ways to play the pop. Construction stock Argan (AGX) is one alternative offering that has seen profits explode of late.

The Arlington, Va.-based firm is very much a data center stock as it provides engineering and construction services to the power generation market. The growth of AI is expected to drive a 160% increase in demand for electricity by 2030, according to Goldman Sachs.

Overall performance is excellent. The IBD Sector Leader holds a strong Composite Rating of 95 out of 99.

Earnings are its biggest strength, with its Earnings Per Share Rating a best-possible 99. Over the past three quarters, earnings have grown by an average 196%. This is well clear of the 25% growth sought by those following IBD investing principles.

Profits are seen falling 6% in fiscal 2026 before accelerating to 27% growth the following year, MarketSurge data shows.

Argan stock is also showing leadership. It currently sits at the summit of the Investor's Business Daily heavy construction industry group

Analyst Rates Construction Stock

Wall Street sentiment is currently positive. It holds a consensus rating of buy with an average price target of 150, according to TipRanks.

Profits should be durable, according to Lake Street Senior Research Analyst Rob Brown. He said the firm is dealing with a replacement cycle now and that new power demand will drive growth.

"Argan noted most of the current project pipeline is related to a planned replacement cycle needed due to aging power generation infrastructure, including replacement of past-life coal plants and end-of-life natural gas plants, which were built around 20 years ago," Brown said in an April 9 research note.

"It expects a second leg of growth from projects to address the new growth in power demand from data centers and EVs," Brown said. He noted that power demand has been flat since the early 2000s "but is now starting to increase."

Brown said that new power generation will be needed for this incremental demand, and that "Argan expects this to drive a second wave of demand and extend the new plant build cycle."

The analyst currently has a buy rating and a 150 price target on the construction stock.

Argan Stock Analysis

The stock has formed a cup-with-handle base. However, the wide and loose nature of the pattern is a flaw.

It is shooting for an ideal buy point of 154.10, MarketSurge analysis shows. This is a first-stage pattern, which means it is more likely to net good gains.

The relative strength line has came off highs, but is turning higher. A sharp upward move here would be a positive if it attempts a breakout.

Argan stock recently found support at the 200-day moving average before moving above the 50-day line. The latter benchmark acted as a support level earlier this week.

So far this year, the construction stock has rallied nearly 9%. This compares favorably to the S&P 500's decline of nearly 7%. It is among the top 3% of issues in terms of price performance over the past 12 months.

Please follow Michael Larkin on X at @IBD_MLarkin for more analysis of growth stocks.

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This article was first published on IBD