Could Legence (LGN) Be a Major Winner From the AI Data Center Construction Boom?

Baron Capital's Q2 2026 investor letter highlights Legence Corp. (LGN) as a potential significant winner from the AI data center construction boom. Despite the U.S. equities rebounding after the March selloff due to AI infrastructure and semiconductors, small caps outperformed large caps, but this performance remained concentrated in high-Beta and Momentum stocks.

The fund benefited from AI-related and industrial holdings, but software and services stocks faced pressure due to potential AI disruption. Baron's analysis suggests Legence Corp., an engineering and construction services provider specializing in mission-critical building systems, played a role in their quarter's 1.24% gain. The company's shares closed at $70.04 as of August 17, 2026, with an 8.44% decline and a 54.22% year-to-date increase.

Legence's market cap stands at $7.57 billion. The fund's CEO noted the company's growth, with revenue and cash flow doubling compared to the previous year, and a record-high backlog providing future growth visibility. Notably, Legence Corp. wasn't among the 40 Most Popular Stocks Among Hedge Funds.