A low-profile Texas company that provides temporary housing for immigrant detainees and oil riggers could get a boost from the data center boom.
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Target Hospitality’s stock is up about 60% since March 31. The company announced on April 1 that it had signed a $550 million deal with a top hyperscaler to house thousands of construction workers building a data center campus in Texas.
The deal is a “landmark” for Target Hospitality, Stifel analyst Stephen Gengaro said Monday in a note to investors.
Target Hospitality has become one of the many non-technology companies hoping to cash in on the AI boom, which has fueled the company’s “largest commercial pipeline ever,” CEO James Brad Archer said last month in an earnings call with investors.
For its new data center client, which the company has not named but has said is a “top 5 hyperscaler,” Target Hospitality is building facilities for 4,000 workers adjacent to a data center construction site in North Texas. The site will feature “elevated hospitality service offerings,” according to a press release.
Target Hospitality specializes in setting up and running large-scale temporary living facilities, also known as “man camps.” Man camps are longtime fixtures of the oil and gas industry, which sends workers to remote locations for extended periods.
The camps are essentially tiny villages of prefab housing units built to be deployed and dismantled quickly. Man camps often feature on-site food, laundry facilities, and gyms for hundreds to thousands of workers at a time.
Amenities Target Hospitality has provided at other sites include swimming pools, on-site housekeeping, volleyball courts, and golf simulators.
Target refers to these camps as “communities.” The company has historically balanced this business with government contracts.
Most recently, Target Hospitality operated two Texas detention centers for US Immigration and Customs Enforcement, according to a company filing.
Target is not the first hospitality company to jump on the bandwagon. Last year, Wyndham said it was planning to open more of its budget hotel chains in areas with heavy data center construction, such as Mississippi and Ohio.
Now, Target is at an “inflection point,” Archer said.
“To be blunt, we’re focused on growing the WHS segment,” Archer said, referring to the company’s Workforce Hospitality Solutions division, or the man camp side of the business.
“We believe it offers the most value creation,” Archer said.
Target Hospitality did not respond to a request for comment from Business Insider.
