This AI derivative play is one of the hottest stocks of the year. Goldman sees even more to go

Following a strong fourth-quarter earnings report last week, Goldman Sachs on Monday hiked its price target on Quanta Services by more than 38%. The bank expects shares of the utility and energy infrastructure company to rise to $685, up from $495, or a nearly 25% gain from Monday’s close. Goldman also maintained its buy rating on the stock. Quanta Services has surged 111% in the past year — and more than 30% just in 2026 — as the artificial intelligence data center buildout has created a huge demand for power. The company delivered a fourth-quarter earnings and revenue beat, while also offering very strong guidance. Quanta Services estimates 2026 earnings before interest, taxes, depreciation and amortization of between $3.34 billion and $3.5 billion, higher than the consensus estimate of $3.19 billion, according to FactSet. PWR 1Y mountain PWR 1-year chart “We believe the company’s strategy is setting up the business to compound earnings growth through the remainder of this decade, through existing businesses having leverage to high growth areas such as transmission and distribution, and recently acquired businesses such as technology and load center focused capabilities adding new high growth avenues,” wrote Goldman analyst Ati Modak in a note. Modak pointed to a joint venture the company has with Zachry Group, a construction and engineering company, which will support Quanta Services to develop gas power generation facilities. He said it’s one of the company’s new sources for growth. Though, Modak reiterated the company’s belief that it will not see margins increase significantly, despite investor interest in expansion opportunities. “We expect over time, with increased labor efficiencies and newer means of operating, that there is room for some margin improvement, but do not expect margins to materially increase from increased pricing,” Modak said.