AAON Stock Rockets 23% as Data Center Cooling Boom Drives Record Quarter and Sharply Higher Sales Outlook

Shares of AAON Inc. jumped more than 23% on Tuesday after the heating and cooling equipment maker reported record third-quarter results well ahead of Wall Street forecasts and sharply raised its full-year sales outlook. Strong demand for its data center cooling systems drove the results.

The stock rose $14.53 to $77.40 in morning trading on the Nasdaq. About 1.2 million shares changed hands, roughly the stock's full-day average over the past three months. Even after the jump, the shares are down about 39% over the past 52 weeks, giving the company a market value of about $6.3 billion.

AAON, based in Tulsa, Oklahoma, said net sales for the quarter ended Sept. 30 rose 84.1% from a year earlier to a record $707.4 million. Analysts surveyed by FactSet had expected about $601 million.

Adjusted earnings were 83 cents per share, more than double the year-ago figure and well above analysts' forecasts of 56 to 57 cents. Operating income rose 129% to $100 million.

The company's BASX unit, which designs specialized cooling systems for data centers, drove most of the growth. BASX-branded sales more than tripled, rising 218.3% to $397.2 million, as hyperscale cloud providers and other operators race to build facilities for artificial intelligence workloads.

AAON raised its forecast for 2026 sales growth to between 72% and 75%, up from 55% to 60% previously. Its total backlog rose 40.5% from a year earlier to about $1.9 billion.

"Our third quarter results reflect strong execution and continued progress turning the investments we have made into stronger operating performance," said Matt Tobolski, president and chief executive of The Aaon Group.

"We delivered record net sales, more than doubled operating income and diluted EPS, improved gross margin 60 basis points sequentially, generated strong cash flow and raised full-year outlook," he said.

Gross margin was 26.7%, up 60 basis points from the second quarter. Year-to-date operating cash flow was $146.9 million, compared with cash used of $18.8 million a year earlier.

The report also raised a governance issue. AAON said it found errors in its first- and second-quarter 2026 financial statements during its third-quarter review and restated those periods. The restatements increased first-half net sales by $10.7 million and diluted earnings per share by 9 cents. The company also disclosed a material weakness in its internal control over financial reporting and said it is continuing to fix it.

Investors largely looked past the restatement and focused on the growth figures. William Blair analysts said AAON "cleared two key hurdles" in the report. They said BASX orders accelerated and that fourth-quarter orders are on track to match or beat last year's very strong $586 million, driven by large repeat orders from hyperscale customers and new customer wins.

Oppenheimer analyst Noah Kaye kept an Outperform rating on the stock and raised his price target to $118 from $115.

The rally follows a difficult year for the stock. Investors had worried about AAON's margins as it expanded manufacturing capacity, and about whether data center spending could keep growing fast enough to justify the investment. The third-quarter results eased both concerns: more output from expanded plants helped drive the sales gain, and margins improved from the prior quarter.

AAON has two main brands. Its AAON line sells rooftop units and other heating and cooling equipment for commercial buildings. BASX makes custom liquid and air cooling systems for data centers and clean rooms. As AI chips use more power and generate more heat, demand for cooling equipment has become one of the fastest-growing parts of the data center supply chain. Several industrial companies have reported their best results in years as a result.

Analysts said keeping margins rising will be key for the stock. William Blair said further gross margin improvement in 2027 would be the "key unlock" for more gains in the share price.

Tuesday's gain was one of the largest on the Nasdaq. AAON was one of several AI infrastructure suppliers that rallied after their results this week.