There is no doubt that market volatility can be intimidating. However, for those who choose to look at a stock’s long-term performance potential, these strong price movements are somewhat rare opportunities to buy high-quality businesses at attractive prices. Additionally, market noises are forcing investors to take a step back and fundamentally re-evaluate whether existing growth opportunities are legitimate or whether a stock’s current momentum is short-lived.
There will always be something to be nervous about in the stock market, but investors who can prioritize logic over emotions can find attractive opportunities in the industrial sector. Here are three picks worth monitoring.
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digital encryption(NASDAQ: CIFR) It rents AI data centers to tech giants, essentially making it the owner of AI development. Cipher Digital provides the power and infrastructure, while technology companies must bring their AI chips.
The stock has gained more than 500% over the past year, but it would be easy to forget those gains after a 32% drop so far this year. Stocks have fallen more than 50% from their all-time highs, with macroeconomic pressure playing a key role. Some investors are also concerned about the significant capital required to build AI data centers, but it is better to focus on how Cipher Digital’s position in a hyper-growth industry can translate into substantial growth in the coming years.
Some of that growth has already materialized. Cipher Digital has signed lucrative contracts with technology leaders that will dwarf its current earnings. One of its deals last year was a 15-year, $5.5 billion contract with Amazon Web Services that will deliver 300 megawatts of capacity. Cipher Digital also secured a 200-megawatt site in Ohio through the end of 2025, indicating it is still expanding its capacity while waiting for the AI ​​opportunity to fully materialize.
Recently, Cipher Digital announced another 15-year deal with a hyperscale tenant. The company simultaneously obtained a $200 million revolving credit facility backed by several large banks. While it would have been nice to know the terms of the deal and who the new client is, this announcement further demonstrates the strong demand for Cipher Mining’s services.
Caterpillar(NYSE: CAT) is a construction stalwart that has been in the business for over 100 years. It’s in the middle of a correction right now, but is still up more than 10% so far this year.
The company’s construction equipment has seen increased demand in part due to the development of AI. A lot of equipment and construction services are required to build AI data centers, but that’s not the only way Caterpillar has benefited from the latest trend.
The company’s power generators have been a big hit as AI data center providers and technology companies look for additional power sources. Power generation sales increased 44% year over year in the fourth quarter. It is part of Caterpillar’s Power and Energy segment, which was up 37% year over year. Construction sales rose 11%, and resource industries fell 7%, showing that electricity and energy demand is the main driver of growth in this cycle.
Sales in this segment were a little slow in the first half of the year, but picked up in the third quarter. That quarter presented a growth of 17% for the Energy and Transportation segment. If AI development continues to increase energy needs, Caterpillar should continue to extend its payback.
argan(NYSE: AGX) provides engineering, procurement and construction services for clients with energy and renewable energy sites. The company has received a big boost due to the development of AI, resulting in an order book of $2.9 billion at the end of fiscal 2026. That is more than double Argan’s order book for fiscal 2025, which stood at $1.4 billion.
While the development of AI presents attractive opportunities, Argan mentioned in its Q4FY26 earnings presentation that decades-old energy assets will require urgent upgrades or replacements across the U.S. The company mentioned that 104 gigawatts at aging power plants are expected to be retired nationwide by 2030. Argan will have to build new plants that are more effective at replacing old ones and ensure those gigawatts can stay online.
Argan stock rose 38% on the day its Q4FY26 results were released, but has retreated since the news. The construction services provider is enjoying multi-year tailwinds that can support future earnings.
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Marc Guberti has positions at Cipher Mining. The Motley Fool has posts and recommends Caterpillar. The Motley Fool has a disclosure policy.
3 Growth Stocks Worth Buying Through Volatility and Holding for Life was originally published by The Motley Fool
