Stocks linked to the infrastructure buildout behind artificial intelligence are drawing fresh investor attention as hyperscalers expand data-center capacity. Vertiv and Argan, which supply key power, cooling, and generation assets, entered 2026 with multi-year visibility in the form of large backlogs—though both companies also face valuation and execution questions as AI-driven electricity demand accelerates.
Key takeaways
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Vertiv reported strong growth with first-quarter fiscal 2026 revenue up year over year to $2.6 billion and an adjusted operating margin rising to 20.8%—a performance investors are tying to AI infrastructure momentum.
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Argan posted faster scaling, with first-quarter revenue increasing 50% to $291 million and net income more than doubling to $46.1 million, supported by a backlog of about $2.8 billion.
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Catalyst: Analysts expect a sustained surge in AI-related capital spending, much of which is expected to flow to cooling systems, electrical equipment, and new power generation.
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Implication: The opportunity is broad across the data-center stack, but investors are paying premium multiples that leave less room for execution missteps, cost overruns, or delayed project awards.
AI capex lifts demand beyond chips
AI spending is increasingly flowing into the physical buildout of data centers. According to CNBC estimates, Amazon, Microsoft, Alphabet, and Meta Platforms could generate nearly $700 billion in combined capital expenditures for 2026, more than 60% above 2025 levels, primarily to expand AI infrastructure.
Wall Street analysts also point to sizable funding for power and thermal management. According to reporting cited in the article, Goldman Sachs and Morgan Stanley estimate AI-related capital spending by U.S. hyperscalers could reach roughly $800 billion in 2026, with Morgan Stanley projecting it could rise to $1.12 trillion in 2027. The report said a substantial portion of that spend would be allocated to cooling systems, electrical equipment, and new power plants required for AI facilities.
For investors, the practical takeaway is that “AI infrastructure” is not only about servers or networking. It is also about delivering electricity efficiently and removing heat at scale—areas where Vertiv and Argan play central roles.
Vertiv: backlog visibility and margin strength
Vertiv provides power management, backup power, and air- and liquid-cooling equipment used in data centers. The article said demand is already showing up in results: in the first quarter of fiscal 2026 ended March 31, Vertiv’s revenue rose 30% year over year to $2.6 billion, while adjusted operating margin increased 4.3 percentage points to 20.8%.
Management guidance in the article pointed to continued acceleration. Vertiv expects 2026 revenue of $13.5 billion to $14 billion and adjusted diluted earnings per share of $6.30 to $6.40.
Investors are also focused on forward order flow. The article said Vertiv entered 2026 with a $15 billion backlog, up 109% year over year and exceeding projected 2026 revenue. Most orders, it said, are expected to ship within 12 to 18 months, providing visibility into 2027, though customer cancellations or rescheduling remain a risk.
On product development, the article said Vertiv is working with Nvidia on 800-volt direct-current power systems for next-generation AI data centers, with plans to launch the portfolio in the second half of 2026 in line with the expected 2027 rollout of Nvidia’s Rubin Ultra platform.
Valuation remains a key concern. According to the article, Vertiv trades for nearly 34.8 times analysts’ expected 2027 earnings, implying that the market is pricing in sustained AI infrastructure demand and continued margin strength while Vertiv expands manufacturing capacity without major supply chain or execution problems.
Argan: power generation exposure and project execution
Argan’s primary exposure to AI-driven infrastructure comes through its subsidiaries Gemma Power Systems and Atlantic Projects Company, which build, commission, and maintain natural-gas and renewable-power facilities. The article said this positioning aligns with projections for rapidly rising data-center power demand. It cited Goldman Sachs expectations that U.S. data-center power demand could more than double from 31 gigawatts in 2025 to 66 gigawatts in 2027.
The report said natural gas accounted for 79% of Argan’s backlog at the end of the first quarter of fiscal 2027 ended April 30, giving the company capacity to respond as electricity demand rises.
Argan also has a secondary pathway tied to thermal energy storage and chilled-water cooling. The article said its industrial segment has a contract to build about 2,000 pressure vessels for thermal energy storage and chilled water-cooling systems at customer data centers. Management added another North Carolina factory to support that contract and pursue additional work.
In early results, the article reported that Argan’s first-quarter revenue increased 50% to $291 million, while net income more than doubled to $46.1 million. It also said Argan exited the quarter with an order backlog of about $2.8 billion, held total cash, cash equivalents and investments of about $973.6 million, and carried no debt.
However, investors are weighing the risk that financial momentum is still catching up to large expectations. The article said the stock is trading at 39 times forward earnings and that the order backlog declined from $2.9 billion at the end of January 2026 to $2.8 billion at the end of April.
The report also flagged structural risks tied to contract terms. It said Argan earns most of its revenue from fixed-price contracts, which can expose the company to equipment delivery delays, rising labor costs, and cost overruns. Slower project awards could further make it harder to replenish backlog as existing projects are completed.
What to watch next
Both companies are positioned to benefit if AI infrastructure spending continues to translate into new power and cooling capacity. For Vertiv, investors will likely focus on whether guidance and backlog conversion hold through 2026 and into 2027, alongside the timing of next-generation power system launches with Nvidia. For Argan, the next signals will include the pace of new project awards and whether backlog stabilizes while execution remains on track, particularly given fixed-price contract exposure. With hyperscaler capex plans forming the underlying demand backdrop, upcoming data-center and power-related spending updates—and broader market moves around interest rates and construction economics—could shape sentiment for the sector.
