Buy Top AI Data Center Stock EME and Hold

Artificial intelligence is fueling the Wall Street bull market, as AI hyperscalers spend hundreds of billions of dollars building large data centers. But it’s difficult to pick winners in an AI future that remains uncertain from a long-term utilization standpoint.

This is why Wall Street has bought up the energy and infrastructure stocks that are benefiting from the energy-hungry AI age, no matter which tech companies eventually win the AI arms race.

EMCOR Group, Inc. EME profits directly from the AI hyperscale data center spending boom and the massive energy and infrastructure growth that's required to support it.

EMCOR stock has soared 820% in the past five years as part of an S&P 500 and sector-crushing 4,000% surge over the past 20 years. Yet, EME’s valuation remains nearly in line with the benchmark.

The electrical construction and energy infrastructure company's upward earnings revisions land it a Zacks Rank #1 (Strong Buy). EMCOR is also attempting to hold a critical technical level that could help it break out and surge again in the fourth quarter after trading sideways since late July. 

Why EME is a Top AI Data Center Stock to Buy Now

EMCOR is a standout provider of mechanical and electrical construction services, industrial and energy infrastructure, and building services. The company boasts that it handles everything from “constructing a hyperscale data center to providing 24/7 support for a cutting-edge hospital to implementing the latest energy efficiency technologies.”

The Connecticut-headquartered firm benefits directly from the AI data center spending boom, electrification, and the broader energy transition. AI hyperscalers are projected to spend roughly $400 billion in capex in 2025 alone, with global data center infrastructure spending set to hit $7 trillion by 2030.

Large AI data centers consume as much electricity as a midsize city, which is a huge reason why U.S. electricity demand is set to grow by ~75% by 2050.

U.S. utilities must double transmission capacity by 2050, with the country aiming to quadruple nuclear capacity over the next 25 years while expanding natural gas, solar, and more.

This backdrop is why Oklo OKLO and other nuclear energy stocks have soared. But Oklo is a speculative pre-revenue nuclear energy stock.

EME posted consistent revenue and earnings growth over the past 15 years outside of a Covid-based pullback. Most importantly, EMCOR’s growth (especially earnings) went into hyperdrive over the last four years as it grows with converging megatrends across technology, energy and utilities infrastructure, reshoring, and more.

It averaged 13.5% YoY revenue expansion over the last four years, while its GAAP earnings per share (EPS) skyrocketed 270% from $5.76 in pre-COVID-2019 to $21.52 in 2024.

EMCOR topped our EPS estimates by an average of 17% in the trailing four quarters, including a strong beat-and-raise Q2 release in late July.

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EME’s earnings estimates have jumped over 6% for 2025 and 2026 since its last report to extend its run of upward revisions. Its Most Accurate estimates also came in above consensus. Its overall positive earnings revisions earn EMCOR stock a Zacks Rank #1 (Strong Buy).

EME is projected to grow its EPS by another 17% in 2025 and 8% next year, on 15% and 5%, respective sales growth.

Clearly, 2026 is projected to mark a slowdown in terms of YoY growth. Yet, it’s worth stressing that EMCOR is projected to double its sales between 2020 and 2026 ($8.80 billion to $17.60 billion) and quadruple its EPS ($6.41 per share to $27 a share).

Buy the AI Data Center Stock for Value and Breakout Potential

EMCOR stock has ripped 1,300% higher in the last decade to blow away the S&P 500’s 250% and its Zacks Building Products - Heavy Construction industry’s 550%. This includes its 815% climb over the past five years vs. its highly-ranked industry’s 445%.

The company’s Building Products-Heavy Construction industry ranks in the top 2% of 245 Zacks industries as the space grows alongside the AI data center boom, energy expansion, and more. Being a part of a top industry boosts EMCOR’s bull case since studies have shown that roughly half of a stock's price movement can be attributed to its industry group.

EMCOR trades about 5% below its recent highs. The stock is attempting to hold its ground near its 50-day moving average and gap up from late July after meeting resistance at its peaks. 

EME could come under pressure along with Oklo and other soaring AI data center-related stocks if Wall Street decides it's finally time to take home some profits heading into the third quarter earnings season.

EMCOR is a stable, dividend-paying company that trades in line with its highly-ranked industry and the S&P 500 at around 23.6X forward earnings.

Any larger pullback to its late 2024 and early 2025 levels or its 200-day would mark a screaming buying opportunity for investors and traders. EMCOR stock has already cooled off a bit alongside Oklo and others, meaning it might be ready to break out of its recent range before it experiences a larger pullback. 

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This article originally published on Zacks Investment Research (zacks.com).

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