Primoris (PRIM) as a Stealth Play on the AI-Driven Infrastructure Boom

The artificial intelligence revolution is reshaping global infrastructure demand, with data centers and energy systems at the epicenter of this transformation. Amid this surge, Primoris Services Corporation (PRIM) emerges as a compelling yet underappreciated player, strategically positioned to capitalize on the confluence of AI-driven data center expansion and energy infrastructure modernization. For investors seeking an early entry point in a high-growth, undervalued contractor, Primoris offers a unique opportunity to align with a megatrend while navigating valuation dislocations.

A Strategic Position in AI-Driven Infrastructure

Primoris's exposure to AI infrastructure is not speculative but operational. The company is currently executing engineering services for three phases of the Stargate data center campus in Texas, a $6 billion initiative explicitly tied to AI development. This project, part of a broader $100 billion national data-center buildout, involves partnerships with industry giants such as OpenAI, Oracle, and SoftBank. Notably, buildings 3, 4, and 5 of the Stargate campus-each valued at $2 billion-are designed to supply GPUs for AI processing, with natural gas power generation ensuring reliability and scalability according to Primoris's EPC work.

This alignment with AI infrastructure is further reinforced by Primoris's expertise in renewable and gas-fired energy projects, which are critical to powering the next generation of data centers. As AI workloads intensify, the demand for energy-efficient, high-capacity infrastructure will only accelerate, positioning Primoris to benefit from both the construction and energy segments of this ecosystem.

Financial Performance and Growth Momentum

Primoris's financial results underscore its ability to translate strategic positioning into tangible growth. For Q3 2025, the company reported revenue of $2.178 billion, a 32.1% year-over-year increase, driven by robust performance in the Energy and Utilities segments. Net income surged 62% to $94.6 million, or $1.73 per diluted share, while adjusted EBITDA rose 32.1% to $168.7 million according to earnings data. These figures reflect not only short-term momentum but also a durable business model, as evidenced by the company's raised full-year 2025 guidance for net income ($260.5–$271.5 million) and adjusted EBITDA ($510–$530 million).

Looking ahead, Primoris is projected to grow adjusted earnings by 16% in FY25 and 14% in FY26, following a 37% EPS expansion in 2024. This trajectory is further validated by Q2 2025 results, where the company exceeded earnings forecasts by 55.56% and revenue estimates by 11.83%. Analysts have since raised their EPS estimates by 8.97% over the past three months, reflecting confidence in the company's execution and market positioning.

Valuation Dislocation and Investment Attractiveness

Despite its strong fundamentals, Primoris appears undervalued relative to its growth prospects. The stock trades at a forward P/E ratio of 23.81, which, while higher than its 5-year average of 13.16, remains below the US Construction industry average of 33.0x according to market analysis. However, the PEG ratio of 3.1x suggests the market may be underestimating its earnings potential, as the company's projected growth (16% in FY25 and 14% in FY26) outpaces its valuation multiple according to financial reports.

This dislocation presents an opportunity for investors. While Primoris's P/E ratio is a premium to its 5-year average, it is significantly lower than the broader market and its peers, which average 30.1x according to valuation data. Moreover, the stock has declined by 1.64% over the past three months despite outperforming earnings and revenue forecasts, creating a potential early buy point for those aligned with the AI infrastructure thesis according to market sentiment.

Strategic Resilience and Long-Term Catalysts

Primoris's resilience is underpinned by its disciplined capital allocation and operational efficiency. The company has consistently prioritized high-margin projects, as seen in its solar and storage initiatives, which contribute to both profitability and long-term relevance in the energy transition according to company reports. Additionally, its robust backlog of work-projected to drive future growth-reduces exposure to near-term volatility while ensuring a steady pipeline of AI-related contracts according to financial updates.

Long-term catalysts include the acceleration of AI infrastructure spending by tech giants and the federal government's push for domestic energy security. With data centers accounting for 2% of global electricity demand and growing, Primoris's dual expertise in energy and construction positions it to capture a disproportionate share of this demand according to industry analysis.

Conclusion: A High-Conviction Buy

Primoris Services Corporation represents a rare combination of strategic relevance, financial strength, and valuation appeal. As a stealth player in the AI-driven infrastructure boom, the company is poised to benefit from both the construction of next-generation data centers and the energy systems that power them. With a forward P/E ratio that underprices its growth trajectory and a backlog of high-impact projects, Primoris offers an attractive entry point for investors seeking exposure to a megatrend with decades of runway.

For those who recognize the inflection point in AI infrastructure and energy demand, Primoris's current valuation appears to offer a compelling margin of safety-a rare alignment of fundamentals and market sentiment in a sector defined by rapid change.