Argan rated 'Strong Buy' as AI and data center demand boost $2.9B backlog and future revenue growth.

Argan (AGX) is rated as a 'Strong Buy' due to significant macro trends in AI and data center demand, which have driven its backlog to $2.9 billion, more than double the previous year. Although revenue growth slowed to 12.7% year-over-year in Q4 2026, the large backlog is expected to convert into strong revenue growth over the next three years. Despite a high price-to-earnings ratio of 69, projected revenue growth of 32% and margin expansion above 20% justify a potential market cap increase of 34–88% from current levels. Key risks include macroeconomic changes affecting AI spending and possible delays in backlog conversion, but management's strong track record supports confidence in the outlook.