AAON (AAON) drew fresh investor attention after management raised its 2026 revenue outlook for the BASX division to about US$1.0b from US$715m, citing stronger demand from AI focused data center projects.

AAON's share price has been choppy around the AI data center story, with a 7 day share price return of 9.76% but a 90 day share price return that is down 27.93%, while the 5 year total shareholder return of 106.49% points to meaningfully stronger long term compounding.

If the AI demand theme has your attention, it could be worth scanning other infrastructure beneficiaries through our screener for 56 AI infrastructure stocks

AAON now appears to be a stronger business on the back of BASX and AI focused demand, yet the stock has just swung sharply and remains well below recent highs. How does the current price compare with that quality?

Most Popular Narrative: 38.4% Undervalued

Based on the most followed narrative, AAON’s fair value of $151.33 sits well above the last close at $93.15, which puts a spotlight on what is driving that valuation gap.

Rapid growth in the data center market, driven by demand for advanced cooling solutions (liquid cooling, custom chillers), is fueling significant BasX brand order wins and partnerships (such as Applied Digital), positioning AAON to capitalize on long-term technology and infrastructure spending. (Impacts revenue and earnings)

Curious how this AI data center story translates into that higher fair value. The narrative leans on faster top line expansion, rising margins and a richer future earnings multiple that still needs to line up with cash flows over time.

Result: Fair Value of $151.33 (UNDERVALUED)

However, AAON's ERP rollout issues and heavy BasX capacity spending could still squeeze margins and cash flow if efficiency gains or data center demand do not materialize as expected.

Another View: AAON Through The Lens Of Earnings Multiples

While the SWS DCF model points to AAON trading 22.3% below an estimated fair value of $119.82, the current P/E of 64.6x tells a different story. It sits above the US Building industry on 23.1x, the peer average on 31.3x, and even the fair ratio of 59.4x. This raises the question of whether the premium is a cushion or a risk if sentiment cools.

Next Steps

Does this mix of optimism and concern around AAON match your own read of the situation, or does it feel off? Take a closer look at the balance of potential upside and downside by reviewing the 3 key rewards and 5 important warning signs

Looking for more investment ideas beyond AAON?

If you are serious about finding your next opportunity, do not just stop with AAON. Use the tools on offer to compare, filter, and pressure test fresh ideas.

• Target stability first by reviewing companies in the 79 resilient stocks with low risk scores that may better align with your comfort level.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.