AAON

AAON ($AAON) CEO Shifts from Peak Selling to Bottom Buying as Data Center Backlog Surges

12/15/2025 22:12

AAON ($AAON) is a US-based manufacturer of commercial HVAC systems and data center cooling solutions, particularly gaining attention in the data center cooling market with its BASX brand. As a mid-cap company with a $6.35 billion market capitalization, it has been expanding market share through high-efficiency solutions differentiated from larger competitors like Trane Technologies and Johnson Controls. The most critical signal for investors right now is the changing pattern in executive trading activity. During the stock's surge from $73 to $140 in the second half of 2024, key executives including CEO Gary Fields conducted massive sell-offs totaling over $15 million. While these were all pursuant to pre-planned 10b5-1 programs, the concentrated selling at peak prices raised investor concerns. However, the recent trend is shifting. In December 2025, officer Stephen Wakefield purchased 6,141 shares worth $480,000 at the $78-82 price range. This marks the first insider buying in nearly 9 months since Director David Stewart's March 2025 purchase, suggesting management views current price levels as undervalued. Market attention was captured by Jehoshaphat Research's short-seller report in November 2025, alleging AAON's BASX data center cooling segment revenues were overstated by 30-40% due to aggressive accounting practices. However, the company immediately refuted these claims and demonstrated BASX's strong growth in Q3 results. Q3 sales increased 17.4% to $384.2 million, with backlog reaching a record $1.32 billion, up 103.8% year-over-year. A detailed examination of financial performance reveals a complex picture. While 2024 was relatively stable, profitability metrics deteriorated in 2025. Q2 2025 EPS fell to $0.22 from $0.62 a year prior, missing analyst expectations of $0.33. However, Q3 showed recovery signals with gross margin improving to 31.5%. Most notably, the company raised its annual sales growth outlook to mid-teens growth. This reflects structural demand growth in data center cooling and market share expansion. With AI and cloud computing proliferation, the data center cooling market is expected to grow over 15% annually, where AAON holds technological advantages. Investors should remain cautious about clear risks. Stock volatility has been extreme, ranging from $73 to $140 over the past year before falling back to $80 levels. With short-seller accounting allegations not fully resolved, additional attacks cannot be ruled out. Investment attractiveness at the current $80 level appears quite compelling. The data center cooling growth theme, record backlog, and insider buying conversion are positive signals. However, short-term earnings volatility and market perception improvement will be key factors. Conservative investors might consider waiting for Q4 earnings to verify actual conversion rates from backlog to sales before entering positions.