How to Invest in the Future of Electricity: 4 Stocks

By 2030, electricity demand from data centers is on track to nearly triple, and the grid that carries it needs hundreds of billions in new investment just to keep up.

But this goes way beyond AI. Electric vehicles, reshored factories, the whole electrification of the economy, it all runs on one thing. The power grid. And right now, that grid is the bottleneck.

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So the money is pouring in. The trouble is where. Everyone is crowding into the same famous names, and when we run the crowd's favorites, the Quantas and GE Vernovas of the world, through our quant model, most come back as nothing better than a Hold.

The real opportunities are the names the crowd hasn't piled into. Today we have 4, builders and suppliers of the electric future, not sleepy utilities. And we're saving the most complete one for last, so stick around.

IES Holdings (IESC)

We will start with IES Holdings (IESC). IES designs and installs the electrical and power systems that go inside data centers, factories, and buildings all across the country. If electricity is the story, IES is the company physically wiring it into place.

Now, here is why IES is exciting right now. The data center boom needs electricians, and IES has more work than it can handle. They are sitting on a record order backlog of $4.5 billion, already signed and waiting to be done, and nearly doubled in under a year.

In their most recent quarter, revenue jumped 40%, driving earnings up roughly 70% from a year ago, blowing past Wall Street's estimates.

And here is the opening. Shares have pulled back about 35% in just three months, a chance to snag shares after a sharp pullback.

Now, Wall Street has barely shown up here, just 1 analyst covers these shares. But he ranks in the top 6% of all analysts, and as of this writing, his fair value target implies more than 100% upside in the year ahead. Thin coverage like that is pure opportunity, as more analysts discover the story, each one can act as a fresh catalyst for shares.

Now let's pop the hood with our Zen Ratings quant model. It analyzes every stock across 115 different fundamental, technical, and AI factors, then boils it all down to one intuitive letter grade, A through F. It also breaks out 7 component grades, Value, Growth, Momentum and more, to flag each stock's unique strengths and weaknesses.

IES earns an A, a Strong Buy recommendation, landing in the top 2% of every stock we track. 

Let’s look at the underlying Component Grades.

• The Artificial Intelligence grade, which measures the likely future timeliness of shares and not how much AI the company sells, comes in at the top 26%, already above the pack. 
• Growth lands in the top 12%, which foreshadows more earnings beats ahead. 
• Sentiment is stronger still at the top 2%, the Smart Money crowd moving in. 
• And the standout, Financial strength in the top 1% of the entire market, the operational excellence that shows up again and again in future earnings reports. 

So the strength clusters exactly where it counts, in the grades that drive future earnings.

IES wires the power into place. But someone has to generate all those new electrons in the first place, and our next pick is building the plants that do it…

Argan (AGX)

Now, our next pick is all about who generates the power, Argan (AGX). Through its main subsidiary, Gemma Power, Argan designs and builds the large-scale electricity generation plants, natural gas, solar and more, that feed the grid.

And business is booming, because you cannot electrify an economy without building new power generation to run it. Every new data center, every reshored factory, every surge in grid demand needs plants that take years to build, and the utilities and tech giants racing to add capacity are lining up for the contractors who can actually deliver on time. That is Argan's sweet spot. And the demand is showing up in the results.

Argan has topped Wall Street's estimates 11 quarters in a row, and its most recent quarter came in more than 50% above a year ago.

And the operating leverage underneath that is striking, over the past year, revenue grew about 30%, while earnings grew even faster, up nearly 50%.

And here is the opening again. Shares have pulled back about 45% over the past three months. For a company compounding earnings like this, that is a textbook chance to buy the dip.

And one of the most accurate analysts on the entire Street is pounding the table here. Robert Brown of Lake Street, who ranks in the top 2% of all analysts, has a fair value target that implies roughly 80% upside from current levels, as of this writing.

Argan earns a Zen Rating of B, equivalent to a Buy recommendation, in the top 15% of all the stocks we track. Now let's take a look at the Component Grades. Sentiment comes in at the top 16%, the Smart Money leaning in. Financial strength lands in the top 11%. Growth is stronger still in the top 9%. And the standout, the Artificial Intelligence grade in the top 3% of the market, which again is about the likely future timeliness of shares. In short, the grades that matter most for future performance are all firing at once. The one soft spot is Momentum, which grades a D, in the bottom 9% of the market, which is just what you would expect after a pullback this steep.

The thing to watch with Argan is that its revenue is lumpy. These are massive construction projects, and the timing of when they start and finish can make results jump around from quarter to quarter.

But with 11 straight beats, a top 3% AI grade, and a generation build-out that is only speeding up, that lumpiness looks like noise around a very strong trend.

Argan generates the power. IES wires it. But between the power plant and the plug, there is a vast web of transmission lines and substations that has to carry all that electricity, and our next pick makes the hardware that holds it together.

Preformed Line Products (PLPC)

That hardware is our next pick, a little-known company called Preformed Line Products (PLPC). Preformed makes the gear that physically holds the grid together. The pieces that support, protect, and connect overhead and underground power lines, the fittings on substations, the hardware that keeps transmission and distribution networks standing. It is as pure a play on transmission and distribution as you will find anywhere on the market.

And here is why it matters right now. You cannot expand or even maintain the grid without this gear. Every new transmission line, every substation, every aging connection that has to be replaced pulls demand straight to a specialist like Preformed. Yet because it is small and quiet, the sell-side has barely noticed it. When everyone is buying ETFs and chasing the famous grid names, a $1.6 billion hardware maker like this slips right through the cracks on Wall Street.

The business itself is firing on all cylinders. In its most recent quarter, Preformed set a company record, sales jumped 25% from a year ago, and that flowed straight through to earnings up a massive 75%. And the driver is exactly our theme, surging demand across its energy markets.

In fact, that was the 3rd quarter in a row where they beat estimates, and the beats are getting bigger.

Now, what's interesting here is Wall Street coverage, or rather, the distinct lack of it. No one's looking at this stock, not a single analyst. But since it's so well-positioned to benefit from a multi-year buildout, it's only a matter of time before that changes.

Our model's read on PLPC stands in sharp contrast with that lack of analyst attention. The stock's fundamentals put it in the top 1% of everything we track, not just a Zen Rating of A but a strong one at that. So let's see what the Component Grades say. Financial strength and Safety both land in the top 14%. Growth comes in stronger at the top 9%. And the standout, Sentiment in the top 3% of the entire market. So while the analysts might be looking away, the smart money crowd is quietly accumulating with real conviction.

The main thing to watch is input costs. Preformed makes physical hardware out of metals, so tariffs and raw material prices can squeeze margins when they spike.

But a top 1% rating, a rock-solid balance sheet, and the Smart Money quietly stepping in, on the purest transmission-and-distribution play out there, this is exactly the kind of hidden name our model is built to surface. And it sets up the final piece of the puzzle perfectly.

And by the way, ratings like these are updated every single day. You can pull a free rating on any of these names, or over 4,600 others, just by typing in a ticker at wallstreetzen.com.

If you want to stay one step ahead of the market, join our Live training every Monday, where we share an updated market outlook and trading plan to outperform, plus a Trade of the Week based on our proven Zen Ratings quant model. It's a free event, but you do need to register at wallstreetzen.com/live. And even if you can't join live, it's still worth signing up, since a replay goes out to all registrants to watch whenever is convenient.

EnerSys (ENS)

Here's something you almost never see. A company that has beaten Wall Street's estimates 19 quarters in a row. That is nearly 5 years without a single miss.

The company is EnerSys (ENS), and it is the perfect stock to close on today. So what does EnerSys do? It stores electricity. EnerSys is one of the world's largest makers of industrial energy storage, the batteries and power systems that keep data centers, telecom networks, and the grid itself running when demand spikes or the power flickers. Generation and transmission get all the attention. But none of it works without storage underneath it. And that is EnerSys.

Here is what makes it exciting right now. As the grid gets more strained and more renewable, the need for stored backup power only grows, and EnerSys sells into that need with incredibly sticky, repeat industrial customers.

That consistency is why it has strung together those 19 straight beats. And look at the leverage underneath it, last quarter, earnings jumped more than 75% from a year ago. Just an incredible stretch of not just consistency, but excellence.

And shares are trading comfortably off their highs, which gives you a far better entry.

And here is the kicker. You can buy all of that quality on sale. Shares trade at a forward price-to-earnings ratio of under 14.

Wall Street coverage is thin, just 2 analysts. But both are pounding the table, and both rank in the top 8% of all analysts. As of this writing, their fair value targets imply upside of roughly 50 to almost 70% in the year ahead. When the sharpest analysts are this bullish on a stock this cheap, it is worth leaning in.

And our Zen Ratings model agrees in a big way. EnerSys earns an A, a Strong Buy recommendation, in the top 4% of all stocks. Walk the grades with us. Safety lands in the top 21%, Growth in the top 15%, and the AI grade in the top 12%, all comfortably above the pack. Then it goes to another level. Financial strength sits in the top 2% of the entire market. And Value, the top 1%, based on a review of 21 different value measures. Growth is nice. But growth plus financial strength plus value, all near the very top of the market, is a powerful combination pointing to future outperformance. The soft spots are Momentum and Sentiment, both only middling, which fits a stock that has pulled back off its highs.

The one risk to keep in mind is that part of EnerSys is tied to the industrial economy, things like forklift and motive power batteries. If industrial demand slows, that piece can soften.

But a top 1% Value grade, a top 2% Financial strength grade, a 19-quarter beat streak, top-tier analysts calling for serious upside, and a valuation cheaper than the average stock, on a company that stores the very electricity this whole list is about. That is why EnerSys is the one we saved for last.

So there you have it. 4 ways to own the future of electricity, straight from our quant model. IES Holdings wiring it into place. Argan generating it. Preformed Line Products carrying it across the grid. And EnerSys storing it.

Every one of these has either pulled back from its highs or is still sitting under the radar, so the window to get in before the crowd catches on may not stay open forever.

And remember, you can pull a free rating on all 4 of these, or over 4,600 other stocks, just by typing in a ticker at wallstreetzen.com. Bookmark it, and check it before any buy, hold, or sell decision.

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