NASDAQ: AAON ❄️🪟
$78.62 | +2.92 (+3.86%)
As of Dec-30-2025, 4:00 PM ET

FUNstock Index™: 7.3 / 10 🎯
High-quality operator with strong secular tailwinds, but valuation still runs hot — execution must stay cool for returns to compound.

🧊 What Does AAON Actually Do?

AAON, Inc. designs and manufactures high-performance HVAC and air-management systems across commercial, industrial, medical, and — increasingly important — data center environments. Think rooftop units, liquid cooling, cleanroom systems, geothermal heat pumps, and the infrastructure that keeps hyperscalers from overheating their billion-dollar AI racks.

Founded in 1987 and headquartered in Tulsa, Oklahoma, AAON operates across three segments:

• AAON Oklahoma

• AAON Coil Products

• BASX (its fast-growing data center and cleanroom brand)

This is not a hype-driven startup. It’s a long-standing industrial compounder that’s suddenly found itself at the intersection of AI, data centers, energy efficiency, and climate regulation.

🔔 Trigger #1: Insider Buy — Small, But Not Nothing

On December 11, 2025, EVP Stephen E. Wakefield bought 6,141 shares at ~$78.88, increasing his stake by 28%.

Isolated insider buys aren’t thunderclaps — but they’re directional signals, especially when made during volatility. Call it a vote of confidence, not a green light.

🏦 Trigger #2: Institutions Are All In (Maybe Too Much)

AAON is institutionally saturated:

• 92.3% of shares held by institutions

• 111.6% of float held (yes, more shares than exist — welcome to modern markets)

• Over 550 institutions on the register

Top holders include Vanguard, BlackRock, Wellington, JPMorgan, and Wasatch. Translation: this is not a neglected stock. Smart money knows it — and owns it.

For AAON (AAON)’s Institutional Ownership breakdown, 🔍 see here.

🐻 Trigger #3: Shorts Are Circling

Short interest sits at ~11.4% — not extreme, but meaningful.

That tells us two things:

1. There’s skepticism about valuation, margins, or execution.

2. If fundamentals re-accelerate, shorts could become forced buyers — and fuel for fans.

Double-edged sword ⚔️.

📊 Trigger #4: Analysts Mostly Like the Story

Wall Street consensus: Moderate Buy / Buy

• Average price targets: low $100s

• Bulls point to backlog, data center exposure, and margin recovery

• Bears worry about ERP hiccups and whether data center demand cools

In other words: good company, debated timing.

🧾 Trigger #5: Earnings — Messy, But Improving

Q3 2025 was a tale of two halves:

The Good

• Revenue +17.4% YoY

• Record backlog: $1.32B (+104% YoY)

• BASX (data center cooling) sales +96%

• Sequential margin improvement

The Not-So-Good

• Gross margin still down YoY (ERP + facility ramp costs)

• GAAP EPS down YoY, despite strong sequential rebound

• Heavy capital spending continues

Management was clear: ERP disruptions hurt margins — but throughput is improving every month.

 👉 Want the full picture? Dive into AAON (AAON)’s financials here.

🧠 The Bigger Picture: Backlog Is the Story

Backlog matters more than any single quarter — and AAON’s backlog is exploding:

• BASX backlog: +119% YoY

• Data center demand remains robust

• Memphis facility ramps through 2026

• AI-driven cooling is not a fad — it’s infrastructure

This isn’t about next quarter’s EPS. It’s about capacity meeting secular demand.

💸 Valuation: Where Optimism Lives (And Risks Lurk)

Let’s be honest — AAON is not cheap:

• Trailing P/E: ~65

• Forward P/E: ~39

• Price/Sales: ~5

• EV/EBITDA: ~33

Even after falling nearly 50% from its 2024 highs, this stock still demands perfect execution.

Quality costs money. Sometimes too much money.

💡💡💡 Curious about another deep oil exploration play?
Check our take on UnitedHealth Group.

🧮 Quick Take / TL;DR ⚡

• ✅ Strong secular tailwinds (AI, data centers, energy efficiency)

• ✅ Massive backlog and institutional support

• ⚠️ Valuation remains aggressive

• ⚠️ Margins still normalizing post-ERP

• ⚔️ Shorts present risk and opportunity

Verdict:
AAON is a fantastic business — but not a bargain. Best accumulated on pullbacks, not chased.

❓ FAQ

Is AAON a data-center pure play?
No — but BASX is becoming increasingly important, and margins there matter.

Why is valuation so high?
Markets are pricing long-term AI and infrastructure growth — not just HVAC units.

Is insider buying meaningful here?
Modestly supportive, not decisive.

Is this a long-term compounder?
Historically, yes. From IPO 35 years ago to today, AAON is a 1,000× stock.

👤 About the Author

Frédéric Marsanne is the founder of FUNanc1al — where markets meet meaning, and numbers occasionally crack a smile. A longtime investor, entrepreneur, and venture-builder across tech, biotech, and fintech, he blends sharp analysis with humor to help readers invest wiser, live better, and question hype. When not decoding insider buys, he’s building Cl1Q, writing fiction, or discovering new passions to FUN-alize.

🧾⚠️📢 Fun(anc1al) but Serious Disclaimer: 🧾⚠️📢

This article blends research and entertainment — not prescriptions or financial advice.

Quality companies can still be overpriced. Hyperventilate responsibly — and remember that side effects may include elevated curiosity, excessive HVAC metaphors, and sudden interest in data-center cooling. 

Always DYOR, resist FOMO, and never invest money you can’t afford to lose. 

We laugh, we analyze, we meme. 
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