Willdan's Strategic Position in the AI-Powered Data Center Boom: Capitalizing on a Structural Tailwind for Energy Infrastructure Enablers

The AI revolution is no longer a distant promise—it's a seismic shift reshaping global energy demand. As artificial intelligence models grow in complexity and adoption, data centers—the lifeblood of this digital transformation—are consuming electricity at an unprecedented rate. For infrastructure enablers like Willdan Group (WLDN), this surge in demand represents a structural tailwind, one that is already translating into outperformance in earnings, margin expansion, and strategic market capture.

The AI-Driven Energy Overload: A $12 Trillion Opportunity

Data centers already account for over 4% of U.S. electricity use, and this figure is projected to balloon to 12% by 2028. AI alone is expected to represent 40% of global data center power demand by 2026, per Joule journal research. This exponential growth is creating a critical bottleneck: power transmission, grid modernization, and energy storage solutions are in urgent need of scaling. Willdan, a leader in energy consulting, engineering, and construction management, is uniquely positioned to address these challenges.

Willdan's Q2 2025 Earnings: A Case Study in Margin Expansion and Revenue Surge

Willdan's Q2 2025 results were nothing short of extraordinary. The company reported 31% year-over-year net revenue growth, driven by 23% organic growth and 8% acquisitive growth, with contract revenue hitting $174 million. Gross margins expanded to 39.4% from 34.6% in 2024, a testament to operational discipline. Net income surged 236% to $15.4 million, while adjusted EBITDA grew 71% to $21.9 million. Adjusted EPS more than doubled to $1.50, far exceeding the Zacks Consensus Estimate.

These results weren't a one-off. Willdan raised its full-year 2025 guidance, now projecting $340–350 million in revenue and $70–73 million in adjusted EBITDA. The Energy segment, which accounts for 85% of revenue, saw a 25% year-over-year increase, fueled by utility programs and grid modernization projects.

Wedbush's Upgraded Target and $9.8M+ in Contract Wins: Proof of Market Capture

Wedbush analysts recently raised their price target for Willdan to $120, citing the company's dominance in AI-powered data center infrastructure. This upgrade follows a string of high-impact contract wins, including a $9.8 million deal with the California Public Utilities Commission to support clean energy goals and a $330 million contract with Los Angeles Department of Water and Power for a municipal utility program.

The company's pipeline is equally compelling. Willdan secured $95 million in Q2 revenue, with 15% tied to high-margin commercial data center electrical projects. Wedbush highlighted $100 million+ in unannounced contracts in New York and California, expected to materialize in 2025–2026. These wins underscore Willdan's expertise in engineering AI-ready infrastructure, including power transmission upgrades and energy storage solutions.

Strategic Acquisitions and Governance: Building a Durable Moat

Willdan's recent acquisitions—such as Enica Engineering and APG—have expanded its capabilities in mission-critical energy services. The company also increased its 2008 Performance Incentive Plan by 150,000 shares, signaling strong governance and alignment with shareholder interests. With $28 million in debt reduction during Q2, Willdan is balancing growth with fiscal prudence.

Investment Thesis: A Mispriced Infrastructure Play

Despite its outperformance, Willdan remains underappreciated by the broader market. Its stock surged 23% to $109.46 following Wedbush's upgrade, but the company's valuation still lags behind peers in the energy infrastructure sector. With AI-driven data center demand set to explode, Willdan's expertise in grid modernization, energy efficiency, and AI-specific infrastructure positions it as a critical enabler of this transition.

For investors, the case is clear: Willdan is capitalizing on a structural tailwind that will only intensify. Its recent earnings outperformance, Wedbush's upgraded target, and a pipeline of $100 million+ in unannounced contracts suggest the company is in the early innings of its growth story. As governments and private investors race to meet AI's energy demands, Willdan's strategic position in this high-margin, high-growth sector offers a compelling opportunity to capitalize before broader market recognition drives a revaluation.

The time to act is now—before the next phase of the AI boom turns Willdan into a household name.