AI doesn't work without electricity. Why MYR Group could be an unexpected winner?
American data centers are no longer built just next to servers, but mainly next to substations. Demand for artificial intelligence is hitting power grid capacity, and that opens space for a narrow group of specialized electrical contractors who can physically bring electricity to the data center, regardless of who ultimately wins the AI race.
Key points
The watched contractor's backlog reached a record $3.16 billion in the second quarter of 2026, up 19.6 percent year over year.
Net profit for the first half of 2026 nearly doubled year over year to $96.7 million, while operating cash flow for the same period fell from $116 to $88 million.
Two fresh acquisitions worth $328 million expand geographic coverage but increased the company's short-term debt.
The stock traded in a range between $171 and $504 over the last twelve months, signaling extraordinary uncertainty about future growth pace.
A price/earnings ratio around 27x puts the company above its ten-year average, though it remains significantly below the valuation of its main competitors in the segment.
Building a new AI data center doesn't end with the last server. Before hundreds of thousands of graphics chips even start running, the data center needs reliable access to electricity in the hundreds of megawatts, and that electricity must first reach the site. In practice, that means new transmission lines, distribution network expansion, construction of substations, electrical installations inside the facility, and often modernization of decades-old surrounding infrastructure.
At this point in the AI story, MYR Group $MYRG enters the scene, an American electrical contractor founded in 1891. The company is not an AI service provider or a hardware manufacturer. It contracts construction and maintenance of electrical networks, substations, and industrial electrical installations across the United States and Canada, and artificial intelligence is one of several demand catalysts for it, not the only source of business.
In this case, an investor is buying a company that can earn from the physical infrastructure needed for AI data centers to operate at all, regardless of which model provider ultimately wins the market. It is important to distinguish how much of MYR Group's stock growth over the last two years reflects a real structural change in demand for electrical infrastructure, and how much is already just expectations of another boom baked into the price.
The stock itself reflects this uncertainty. Since the beginning of 2026, it has moved between roughly $171 and $504 per share, before settling around $286 in mid-September. Such a spread does not correspond to a company whose business is primarily based on long-term contracts with regulated utilities.
MYR Group
Business model: T&D and C&I segments
MYR Group runs its business in two segments, and their mutual ratio is key to understanding the whole story.
Segment | LTM revenue (to 6/2026) | Backlog (6/2026) | Typical work |
|---|---|---|---|
Transmission & Distribution (T&D) | $2.10 billion | $1.27 billion | Transmission lines, distribution networks, substations, connecting new capacity |
Commercial & Industrial (C&I) | $1.91 billion | $1.89 billion | Electrical installations in commercial and industrial facilities |
A large part of the T&D segment's work runs on long-term master service agreements with regulated utilities like Xcel Energy, giving it a high degree of predictability. The C&I segment, on the other hand, covers a broader range of end markets, which the company itself lists as:
data centers,
transportation infrastructure,
healthcare,
manufacturing plants and reshoring of American production,
clean energy facilities,
EV charging infrastructure.
Data centers and reshoring are among the fastest-growing categories in this list. This split is also why MYR Group could grow even in a hypothetical scenario where AI data center construction slows: grid modernization and industrial electrification demand represent a separate, longer-term investment cycle in which data centers are just one accelerator, not the only source.