AAON Stock Soars 37.8% on Record Data Center Cooling Sales

AAON (AAON) stock surged 37.8% this week, closing at $78.80 on Thursday, Nov. 12, after the company reported record third-quarter results that blew past analyst expectations. The HVAC and cooling systems manufacturer posted net sales of $707.4 million, up 84.1% year over year, easily topping the consensus estimate of $601.2 million. Adjusted earnings per share came in at $0.83, more than double the prior-year period's $0.37.

The standout performer was AAON's BASX brand, which makes specialized liquid-cooling equipment for artificial intelligence data centers. BASX sales skyrocketed 218% to $397.2 million, driven by the need for heavy-duty thermal management in high-density computing environments. This rapid ramp-up in data center orders accelerated total sales and prompted management to raise its full-year sales growth forecast to 72%-75%.

Alongside the record sales, AAON disclosed a material weakness in internal controls over financial reporting, which required a first-half results restatement. However, the adjustment actually added $10.7 million to revenue. Management also expanded its senior credit facility to $1.2 billion to fund factory capacity expansion, signaling confidence in continued demand.

The surge in data center cooling revenue confirms that AAON's thermal management business is capturing high-margin demand from AI infrastructure builds, despite the internal accounting control fixes. The stock's rally this week reflects investor enthusiasm for its growth trajectory in the AI data center space.

AAON's stock now trades at a trailing price-to-earnings (P/E) ratio of 32.3, which sits within a peer range: Lennox International at 15.7, Trane Technologies at 29.8, and Modine Manufacturing at 44.4. On its own, the multiple doesn't scream cheap or expensive, but it's worth noting that AAON's five-year average P/E is 48, suggesting shares are currently at a discount to their historical valuation.

The key driver for future performance will be execution on the data center order backlog. Investors should focus on whether the company can maintain manufacturing throughput without expanding control issues when it reports fourth-quarter results. The raised guidance implies strong revenue growth ahead, but the shift toward lower-margin BASX products is already pressuring gross profit margin, which declined from 27.8% to 26.7% year over year in Q3 2026.

If margin contraction continues, it could undermine the bull case, as it would suggest that the data center business is less profitable than the core HVAC segment. However, the massive demand for AI infrastructure cooling solutions provides a powerful tailwind that could offset margin headwinds if volumes continue to scale.

Compared to peers, AAON's growth rate stands out, but its valuation is not out of line with the sector. The company's ability to capture high-margin data center demand while managing internal controls will determine whether the stock can sustain its momentum. For now, the market is betting that AAON's niche in liquid cooling for AI data centers will drive continued outperformance.