Is AAON a Buy or a Sell? The Bull and Bear Case (2026)

That depends on which case you find more convincing, and both are on this page. The bull case rests on Data center liquid cooling (BASX), with revenue (ttm) at ~$1.93B. The bear case rests on valuation remains a central risk even after the multiple fell: AAON trades near 39x trailing earnings, and the stock's roughly 29% drop over three months to mid-October 2026, despite a strong Q2, shows how sharply sentiment can compress the price. Analysts covering it are spread from $110.00 to $154.00, which is itself a signal that this is genuinely contested. If you believe the thesis, the real questions become sizing and overlap rather than timing. Walnut is not an investment adviser and this is not a recommendation.

Nobody can answer that for you, and the honest version of the question is narrower: has anything changed in the reason you bought it? The bear case on this page is the place to check. Valuation remains a central risk even after the multiple fell: AAON trades near 39x trailing earnings, and the stock's roughly 29% drop over three months to mid-October 2026, despite a strong Q2, shows how sharply sentiment can compress the price. If that risk is what you were worried about and it is now playing out, that is a real signal. If the price simply fell while the thesis held, that is a different situation entirely. The most pessimistic published target is $110.00, +49.2% from the $73.73 price, which is one analyst's downside case rather than a floor. Walnut is not an investment adviser.

Data center liquid cooling (BASX). BASX-branded sales rose ~72% year over year in Q1 2026 to ~$229 million, driven by liquid-cooling demand for AI data centers. The most optimistic analyst target on AAON is $154.00, +108.9% from the $73.73 price. That figure is only reachable if this thesis works close to its best case.

Valuation remains a central risk even after the multiple fell: AAON trades near 39x trailing earnings, and the stock's roughly 29% drop over three months to mid-October 2026, despite a strong Q2, shows how sharply sentiment can compress the price. Oppenheimer trimmed its target to $115 from $125 in October while keeping an Outperform rating. The data center growth story concentrates revenue in a small number of hyperscale customers whose capital spending can be lumpy or slow if AI infrastructure demand cools. Execution risk is elevated as the company ramps new capacity, and gross margins have compressed during the ramp. The core HVAC business remains cyclical and exposed to nonresidential construction, interest rates, and input costs. Larger, better-capitalized competitors such as Vertiv, Johnson Controls, and Carrier are investing aggressively in liquid cooling, which could pressure pricing and share over time. Negative free cash flow during the capacity build adds balance-sheet sensitivity, with about $452 million of debt and minimal cash on hand at June 30, 2026. The most pessimistic published target is $110.00, +49.2% from the current price, which is roughly what the stock is worth if these risks bite rather than the drivers.

AAON, Inc., together with its subsidiaries, engages in engineering, manufacturing, marketing, and selling air conditioning and heating equipment in the United States and Canada.

Decide that in advance, because it is far harder to think clearly once a position is moving against you. The concrete tripwires here: the driver behind the bull case (Data center liquid cooling (BASX)) stalling in the reported numbers rather than in the narrative, the risk above (valuation remains a central risk even after the multiple fell: AAON trades near 39x trailing earnings, and the stock's roughly 29% drop over three months to mid-October 2026, despite a strong Q2, shows how sharply sentiment can compress the price) turning from a possibility into a reported fact, or the position growing large enough that a bad outcome would matter to your whole portfolio regardless of who is right.

AAON, Inc. designs and manufactures premium commercial and industrial HVAC equipment, including rooftop units, air handlers, energy recovery units, and heat pumps. Through its BASX brand it also builds data center liquid-cooling and cleanroom systems for AI and cloud infrastructure.

Its BASX segment supplies liquid-cooling solutions for AI data centers, and that demand has roughly doubled AAON's backlog to a record ~$2.13 billion at the end of Q1 2026. BASX sales grew rapidly through 2025 and 2026, shifting the company's revenue mix toward AI infrastructure spending.

Q1 2026 revenue rose ~54% year over year to ~$497 million, and Q2 2026 revenue roughly doubled to ~$627 million. Management had raised full-year 2026 revenue growth guidance to roughly 40%-45%, and analyst consensus now sits near $2.31 billion for the year, about 60% above 2025.