Shares of AAON (AAON 1.10%) soared as much as 51.6% on Thursday morning thanks to a stellar earnings report. The industrial air conditioning, heating, and cooling expert's stock had chilled slightly to a 40.4% gain as of 12:30 p.m. ET. Either way, the stock is trading at an all-time high today.
Image source: Getty Images.
AAON's quarter was too hot to handle
Wall Street expected a decent quarter from AAON. What it got was a blowout.
Revenue of $497 million crushed the $381 million consensus. That's a 54% year-over-year jump. Earnings rose 37% to $0.48 per diluted share. Here, the average analyst had expected roughly $0.45 per share.
So far, pretty great. But the real story was the backlog of unfilled orders.
AAON now has a $2.1 billion order book. That's more than double the backlog seen a year ago, and it's full of data center contracts.
NASDAQ: AAON
Key Data Points
Keeping AI cool is heating up AAON's business
Margins dipped as AAON scrambled to expand its manufacturing capacity, but with that kind of demand pipeline, investors voted with their wallets in favor of some heavy spending.
Here's something the AI hype cycle doesn't always mention: Data centers housing AI infrastructure generate enormous amounts of heat and require specialized cooling solutions. AAON has been retooling its manufacturing facilities to meet this demand. Management now expects the Basics segment (which focuses on data center cooling systems) to generate roughly $1 billion in revenue for 2026. The long-term capacity target now stands north of $2 billion.
"As we progress through 2026, our priorities are clear and unchanged," CEO Matt Tobolski said in a prepared statement. "Drive throughput, convert backlog, and deliver disciplined margin progression over time."
Sounds like a high-growth plan to me, and to many AAON investors. Today, the stock is trading at a lofty 105 times trailing earnings.
