In a significant market development, the rise of AI is fueling a surge in data center construction. Tech giants like Microsoft and Amazon are investing record amounts, with spending reaching $360 billion. Data centers consumed 415 TWh of electricity in 2024, a figure set to rise to 945 TWh by 2030 as they drive global electricity demand higher.

Generac Holdings, a key player in the energy sector, offers power solutions for homes, businesses, and industries. With a strong focus on data centers, Generac provides reliable backup power solutions and industrial-strength generators to meet high demands in this segment. The company’s recent financial results beat expectations and showed strong growth, leading to a spike in stock value.

Primoris Services, a specialized contractor, focuses on building sustainable infrastructure for utility, energy, and renewable power sectors. With expertise in data center construction, Primoris offers comprehensive solutions, including natural gas and solar power sources, grid connections, and maintenance systems. The company’s revenues have been steadily increasing, with strong quarterly performance and growth potential in data center projects.

Analyst Sean Milligan sees potential in both Generac and Primoris due to their involvement in the data center business. He projects further growth and margin improvements as data center revenues scale up, driving upside in revenue and margins. With Buy ratings on both stocks, Milligan sets price targets indicating significant potential upside, reflecting the positive outlook for these companies in the expanding data center market.

Read more at Yahoo Finance: Needham Sees Opportunity in 2 Lesser-Known Energy Stocks Riding the Data-Center Boom