Why This Under-the-Radar Winning Stock Jumped Early Friday

Stock market followers often take interest in names that jump as much as 10% in a single session. It's even more intriguing to find that the stock has more than tripled year to date. That's the case with one lesser-known industrial stock today.

Argan (NYSE: AGX) shares popped nearly 10% after it released fiscal 2025 third-quarter earnings for the period ended Oct. 31. And its shares have soared by 213% year to date.

That might be a surprise to investors who don't follow many companies like this energy and industrial contractor. But Argan stock has been a huge winner this year. Its massive 2024 gains also help explain why it couldn't hold today's jump, as shares were down by 2.2% as of 11:36 a.m. ET.

Another artificial intelligence (AI) play

Argan reported a 57% year-over-year jump in quarterly revenue. That was largely driven by a 75% increase in sales in its power industry services segment.

Argan provides engineering, construction, and related commissioning, maintenance, and consulting services to the power and industrial construction sectors. Demand for its services has jumped, with power needs growing as data centers are being rapidly built to supply energy to support the expansion of artificial intelligence (AI) computing.

Argan CEO David Watson summed up the current business climate this way:

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 [electric vehicle] charger utilization.

The company also has a strong balance sheet, with no debt and over $500 million in cash and equivalents as of Oct. 31. Investors also likely noticed the 25% increase in Argan's dividend in the quarter.

While Argan may be an under-the-radar company for some, it has become an AI play for other investors. The stock recently traded at a forward price-to-earnings (P/E) ratio of 35. That's far above its five-year average of about 17. That explains why the stock didn't hold its gains today, but it should still stay on investors' radar.

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Howard Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.