Market Overview - U.S. stocks experienced a halt in their bull run in February, concluding a volatile month, with investor sentiment expected to remain shaky in March, leading to continued volatility in trading patterns [1] - Geopolitical conflicts in the Middle East, uncertainties regarding President Trump's tariff policies, and concerns about AI trade have negatively impacted market confidence [1] Growth Stock Recommendations - Five growth stocks have been identified for purchase in March to enhance investor portfolios, focusing on stocks with aggressive earnings or revenue growth [2] - The recommended stocks are Micron Technology Inc. (MU), Comfort Systems USA Inc. (FIX), Deckers Outdoor Corp. (DECK), HubSpot Inc. (HUBS), and Sandisk Corp. (SNDK), all holding a Zacks Rank 1 (Strong Buy) and a Growth Score of A or B [3] Micron Technology Inc. (MU) - Micron Technology is a leader in the AI infrastructure boom, driven by strong demand for high-bandwidth memory (HBM) solutions, with record sales in the data center market [4] - The adoption of AI servers is reshaping the DRAM market, increasing demand for high-capacity DIMMs and low-power server DRAM, which MU is capitalizing on with a strong product roadmap including HBM4, expected for volume production in 2026 [5] - Micron's diversification strategy has created a stable revenue base by shifting focus from consumer electronics to resilient sectors like automotive and enterprise IT, with expected revenue and earnings growth rates exceeding 100% for the current year [6][7] Comfort Systems USA Inc. (FIX) - Comfort Systems USA operates in the commercial and industrial HVAC markets, providing services to various facilities including manufacturing plants and healthcare [8] - The data center boom, driven by AI and cloud computing, is increasing demand for specialized HVAC solutions, presenting high-margin opportunities for FIX [9] - Comfort Systems has an expected revenue growth rate of 20.3% and earnings growth rate of 28.2% for the current year, with earnings estimates improving by 11.7% in the past week [11] Deckers Outdoor Corp. (DECK) - Deckers Outdoor is experiencing strong momentum, particularly through its HOKA and UGG brands, with HOKA being a key growth driver supported by global demand [12] - The company is diversifying its international markets, enhancing long-term earnings visibility, while maintaining pricing discipline and cost controls to support margins [13] - Deckers has an expected revenue growth rate of 7.5% and earnings growth rate of 7.4% for the next fiscal year, with earnings estimates improving by 6.4% over the past month [14] HubSpot Inc. (HUBS) - HubSpot is seeing steady adoption from enterprise customers, with pricing optimization leading to solid client additions [15] - The integration of AI features across its product suite is enhancing customer value, with expectations for growth driven by a transition to a seat pricing model [16] - HubSpot has an expected revenue growth rate of 17.9% and earnings growth rate of 26.5% for the current year, with earnings estimates improving by 7.1% in the past month [17] Sandisk Corp. (SNDK) - Sandisk is benefiting from the shift towards AI computing, which requires more NAND flash storage, creating a favorable demand environment for its advanced technology products [18] - The company reported a 76% year-over-year increase in datacenter revenues, driven by adoption from cloud hyperscalers and enterprise customers [19] - Sandisk has an expected revenue growth rate of 94.1% and earnings growth rate exceeding 100% for the current year, with earnings estimates improving by 57.2% over the past month [22]

Core Insights - AAON reported strong sales growth in 2025, with net sales increasing by 20.1% to $1.44 billion, driven by robust bookings and market share gains [1][2] - The company faced margin pressures due to strategic investments in production expansion and ERP implementation, resulting in a GAAP diluted EPS of $1.29, down from $2.02 in 2024 [1][2] - AAON ended 2025 with a record backlog of $1.83 billion, up 110.9% year-over-year, providing strong visibility for 2026 [1][2] Full Year 2025 Results - Net sales for 2025 reached $1.44 billion, a 20.1% increase from $1.20 billion in 2024 [1] - Gross margin decreased to 26.7% from 33.1% in 2024 [1] - GAAP diluted EPS was $1.29 compared to $2.02 in 2024 [1] Fourth Quarter 2025 Results - Fourth quarter net sales increased by 42.5% to $424.2 million from $297.7 million in Q4 2024 [1] - GAAP diluted EPS for Q4 was $0.39, up 30.0% from $0.30 in Q4 2024 [1] - Gross margin for Q4 was 25.9%, slightly down from 26.1% in the prior year [1] 2026 Outlook - The company anticipates revenue growth of 18-20% in 2026, with gross margins expected to be approximately 29-31% [2] - SG&A expenses as a percentage of sales are projected to be around 16% [2] - Capital expenditure plans for 2026 are set at $190 million [2] Segment Performance - AAON Oklahoma segment net sales increased by 11.1% year-over-year to $215.5 million [2] - AAON Coil Products segment saw a 93.6% increase in net sales to $102.6 million, driven by strong BASX-branded liquid cooling sales [2] - BASX segment net sales rose by 109.1% to $106.1 million, supported by high demand for data center equipment [2] Backlog and Production Capacity - Total backlog increased by 110.9% year-over-year to $1.83 billion, with BASX-branded backlog up 141.3% [1][2] - The company’s manufacturing footprint expanded by approximately 25%, with production capacity for BASX-branded equipment more than doubling [1][2] - The Memphis facility is expected to support a steady ramp in production in 2026 [2]

Core Viewpoint - AAON, Inc. is identified as a high-growth industrial stock with a positive outlook from analysts, particularly following a meeting with management at the AHR Expo in Las Vegas [1][2]. Group 1: Company Overview - AAON, Inc. manufactures customizable, high-performance HVAC solutions for commercial and industrial buildings, including rooftop units, chillers, and data center cooling systems [3]. - The company has a robust product portfolio that is well-positioned to meet the needs of future data center builds, especially with the evolving capabilities of GPUs and coolant requirements [2]. Group 2: Financial Position - AAON has increased its borrowing capacity under a revolving credit facility by $100 million, raising it to $600 million to secure financing for working capital needs while ramping up operations at its Memphis facility [3]. Group 3: Analyst Sentiment - Analysts at DA Davidson have reiterated a Buy rating and set a price target of $120 for AAON, reflecting confidence in the company's ability to achieve or exceed its 2027 financial framework [1][2].

Company Overview - Comfort Systems USA (NYSE: FIX) has seen its stock price more than double over the past year, driven by recognition of its potential in the artificial intelligence (AI) industry [2] - The company has a significant backlog of $9.38 billion, which is up 65% year over year, indicating strong demand for its HVAC solutions [4] Financial Performance - Comfort Systems USA reported a 35% year-over-year revenue increase in the third quarter, showcasing robust financial growth [7] - The company raised its dividend by 20% last year, reflecting a strong balance sheet and financial health, although the current yield is only 0.24% [6][8] Market Position and Strategy - The company has expanded its market share through acquisitions, including electrical companies in Western Michigan and Southern Florida, which are expected to generate an additional $200 million in annual revenue [5] - Comfort Systems USA operates 184 locations in 139 cities across the nation, positioning it advantageously near many AI hotspots and enhancing its competitive edge [7][8] Industry Trends - The HVAC sector is poised for growth as demand for AI chips increases, necessitating effective cooling solutions [4][8] - Companies are increasingly turning to HVAC providers like Comfort Systems USA to maintain optimal operating temperatures for AI chips, indicating a favorable trend for the industry [8]

Market Overview - U.S. stock markets are experiencing a continued upward trend in 2025, supported by expectations of further Federal Reserve rate cuts, strong third-quarter earnings, and optimism surrounding artificial intelligence [1] Recommended Growth Stocks - Five growth stocks are recommended for portfolio strengthening in December: Micron Technology Inc. (MU), Comfort Systems USA Inc. (FIX), Kinross Gold Corp. (KGC), On Holding AG (ONON), and MongoDB Inc. (MDB). Each stock has a Zacks Rank 1 (Strong Buy) and a Growth Score of A [2] Micron Technology Inc. (MU) - Micron Technology is a leader in the AI infrastructure boom, driven by strong demand for high-bandwidth memory (HBM) solutions, with record sales in the data center market [6][10] - The growing adoption of AI servers is reshaping the DRAM market, increasing demand for high-capacity DIMMs and low-power server DRAM, which MU is well-positioned to capitalize on [7] - Micron's diversification strategy has created a more stable revenue base by shifting focus from consumer electronics to resilient sectors like automotive and enterprise IT [8] - Expected revenue and earnings growth rates for Micron are 62% and over 100%, respectively, for the current year ending August 2026 [10] Comfort Systems USA Inc. (FIX) - Comfort Systems USA operates in the commercial and industrial HVAC markets, with a focus on manufacturing plants, office buildings, and healthcare facilities [11] - The data center boom, driven by AI and cloud computing, is increasing demand for specialized HVAC solutions, presenting high-margin opportunities for FIX [12][13] - Expected revenue and earnings growth rates for Comfort Systems are 14.7% and 16.4%, respectively, for the next year [13] Kinross Gold Corp. (KGC) - Kinross Gold has a strong production profile and a promising pipeline of exploration projects, focusing on organic growth through its Tasiast mine [14] - The company expects higher output and cash flow from expansions at Tasiast, Manh Choh, and Great Bear, benefiting from rising gold prices [15][16] - Expected revenue and earnings growth rates for Kinross are 9.9% and 32.6%, respectively, for the next year [16] On Holding AG (ONON) - On Holding provides footwear and sports apparel products, with expected revenue and earnings growth rates of 21.1% and 79.3%, respectively, for the next year [17] MongoDB Inc. (MDB) - MongoDB has expanded its Atlas platform into analytics, focusing on developer-friendly interfaces and distributed architectures, targeting modern workloads [18] - The company has benefited from platform adoption across enterprises and startups, with a focus on larger enterprises supporting deal sizes and sales efficiency [19] - Expected revenue and earnings growth rates for MongoDB are 12.8% and 16.6%, respectively, for the next year ending January 2027 [21]

Industry Overview - The artificial intelligence (AI) sector, bolstered by the growth of cloud computing and data centers, is experiencing robust demand, particularly for data center capacity to manage and store cloud-based data [1] - The "magnificent 7" stocks are projected to invest $380 billion in 2025 for AI infrastructure development, representing a 54% year-over-year increase in capital expenditure [2] Company Summaries Comfort Systems USA Inc. (FIX) - FIX operates in the HVAC markets, providing services primarily in commercial and industrial sectors [7] - The demand for specialized HVAC solutions is increasing due to the data center boom driven by AI and cloud computing [8] - FIX has an expected revenue growth rate of 14.7% and earnings growth rate of 16.4% for the next year, with earnings estimates improving by 21.1% in the last 60 days [11] Vertiv Holdings Co (VRT) - VRT is a global provider of critical digital infrastructure and services for data centers and communication networks [12] - The company is expanding capacity to meet the growing demand for AI-enabled solutions, supported by strategic acquisitions [13] - VRT has an expected revenue growth rate of 20.7% and earnings growth rate of 26.3% for the next year, with earnings estimates improving by 0.4% over the last 30 days [15] Sterling Infrastructure Inc. (STRL) - STRL is an engineering firm benefiting from strong momentum in its E-Infrastructure business, which is the primary growth driver [16] - In Q3 2025, STRL's revenues from E-Infrastructure reached $417.1 million, growing approximately 58% year-over-year, with AI-powered data center market revenues rising over 125% [17] - STRL has an expected revenue growth rate of 19.1% and earnings growth rate of 14.6% for the next year, with earnings estimates improving by 8.8% in the last 30 days [19] Dominion Energy Inc. (D) - D is focused on strengthening its electric and natural gas infrastructure while adding renewable assets to achieve carbon neutrality by 2050 [20] - The company is experiencing increased demand from large data centers, which is enhancing its service performance [21] - D has an expected revenue growth rate of 6% and earnings growth rate of 5.9% for the next year, with earnings estimates improving by 0.3% over the last 30 days [22] Alcoa Corp. (AA) - AA is positioned as a potential dark horse in the AI-driven data center boom, as aluminum is critical for various data center components [23] - The company is exploring opportunities to unlock value from its closed sites with large power capacities for conversion into data centers [24] - AA has an expected revenue growth rate of 3.1% and earnings growth rate of 3.1% for the next year, with earnings estimates improving by 17.8% in the last seven days [24]

Core Insights - AAON, Inc. has announced the promotion of Doug Wichman to executive vice president and general manager of its AAON Business Unit effective January 1, 2026, succeeding Stephen Wakefield who will transition to a consultancy role [1][3]. Group 1: Leadership Transition - Doug Wichman will lead the teams responsible for translating corporate objectives into strategic business plans, developing product roadmaps, overseeing engineering and R&D for semi-custom HVAC solutions, and providing technical support to channel partners and end-users [2]. - Wichman has been with AAON since 2012, progressing from a production and manufacturing engineer to plant manager and director of manufacturing, and most recently serving as vice president of business strategy and performance [4][5]. - Stephen Wakefield, who has over 25 years of experience, will continue to support the organization as a principal engineering advisor [5][6]. Group 2: Company Overview - AAON, founded in 1988, is a leader in HVAC solutions for commercial and industrial indoor environments, focusing on designing and manufacturing highly configurable equipment [6]. - The company is headquartered in Tulsa, Oklahoma, where it has a world-class innovation center and testing lab to advance the industry [6].

Core Insights - Trane Technologies plc (TT) is a global leader in sustainable HVAC solutions and transport refrigeration systems, with a market capitalization of approximately $93.1 billion [1] Stock Performance - TT shares are currently trading about 11.9% below their July high of $476.18, with a slight decline of nearly 1.5% over the past three months, which is less severe compared to the SPDR S&P Homebuilders ETF (XHB) that dropped 5% in the same period [2] - Over the past 52 weeks, TT has posted a marginal gain, while XHB has decreased by 11.1%. Year-to-date, TT stock has advanced 13.6%, outperforming XHB's 4.5% rise [3] Earnings Report - On October 30, TT reported Q3 2025 earnings with an adjusted EPS of $3.88, reflecting a 15.1% increase year-over-year and surpassing analyst expectations of $3.78. This was supported by an operating margin expansion to 20.3% from 18.8% [4] - Revenue for the quarter grew 5.6% annually to $5.74 billion, slightly below the consensus estimate of $5.79 billion. Despite this, management reaffirmed its full-year outlook, projecting approximately 7% revenue growth for fiscal year 2025 and adjusted continuing EPS of $12.95 to $13.05 [5] Competitive Position - Relative performance indicates TT's stronger execution in a challenging industry environment, as its competitor AAON, Inc. has seen a significant decline of 33.6% over the past 52 weeks and 20.8% year-to-date [6]

Core Insights - The AI-driven bull run of 2023 and 2024 has continued into 2025, with stock prices of AI-centric companies increasing by 300-500% during this period [1] - Old economy stocks from sectors such as industrials, finance, auto, materials, and construction have also seen significant gains, indicating a broad-based market rally [2] Old Economy Stocks - Five old-economy stocks have rallied over 15% year to date and have favorable Zacks Ranks indicating further upside potential in 2026: Comfort Systems USA Inc. (FIX), The Travelers Companies Inc. (TRV), General Motors Co. (GM), JPMorgan Chase & Co. (JPM), and Crane Co. (CR) [3][9] - Each of these stocks carries a Zacks Rank of 1 (Strong Buy) or 2 (Buy) [3] Comfort Systems USA Inc. (FIX) - FIX operates primarily in the HVAC markets and is benefiting from the data center boom driven by AI and cloud computing [6][7] - The company has an expected revenue growth rate of 14.7% and earnings growth rate of 16.4% for the next year, with a 20.1% improvement in the Zacks Consensus Estimate for next year's earnings over the last 30 days [8] The Travelers Companies Inc. (TRV) - TRV has a strong market presence in auto, homeowners' insurance, and commercial property-casualty insurance, with a high retention rate and positive renewal premium changes [10][11] - The expected revenue growth rate is 3.4% and earnings growth rate is 6.7% for the next year, with a 2% improvement in the Zacks Consensus Estimate for next year's earnings over the last 30 days [12] General Motors Co. (GM) - GM holds a 17% market share in the U.S. automotive market, supported by strong demand for its brands and a 10% year-over-year sales increase in China [13][14] - The expected revenue growth rate is -0.8% and earnings growth rate is 11.5% for the next year, with a 6.5% improvement in the Zacks Consensus Estimate for next year's earnings over the last 30 days [15] JPMorgan Chase & Co. (JPM) - JPM is expected to see net interest income growth driven by business expansion initiatives and high interest rates, with a projected CAGR of 3.3% by 2027 [16] - The expected revenue and earnings growth rate for the next year is 3.7%, with a slight improvement in the Zacks Consensus Estimate for next year's earnings [18] Crane Co. (CR) - Crane manufactures engineered industrial products across various regions and has an expected revenue growth rate of 6.1% and earnings growth rate of 9.5% for the next year [19] - The Zacks Consensus Estimate for next year's earnings has improved by 2.5% over the last 30 days [19]

Industry Overview - The artificial intelligence (AI) sector, bolstered by the growth of cloud computing and data centers, is experiencing a robust demand scenario, with a significant surge in data center capacity needed to manage and store cloud-based data [1] - AI infrastructure capital expenditure (capex) is projected to exceed $1 trillion by 2028 according to Goldman Sachs and Bank of America, while JP Morgan and Citigroup forecast a cumulative total of $5 trillion by 2030. McKinsey & Co. estimates that global AI-powered data center infrastructure capex will reach around $7 trillion by 2030 [2] Company Recommendations - Investors are advised to buy and hold five non-technology U.S. companies that are expected to benefit from the AI-driven data center boom in 2026. These companies have shown significant stock performance in 2025 [3] - The recommended companies include Comfort Systems USA Inc. (FIX), Vertiv Holdings Co. (VRT), Mirion Technologies Inc. (MIR), BWX Technologies Inc. (BWXT), and EMCOR Group Inc. (EME), all of which currently hold a Zacks Rank of 1 (Strong Buy) or 2 (Buy) [4] Company Insights Comfort Systems USA Inc. (FIX) - FIX operates primarily in the HVAC markets and is experiencing increased demand for specialized HVAC solutions due to the data center boom driven by AI and cloud computing [7][8] - The company is expanding its data center construction work, which is becoming a significant growth driver and attracting M&A activity [10] - Expected revenue and earnings growth rates for FIX are 14.7% and 16.4%, respectively, for the next year, with a 20.1% improvement in the Zacks Consensus Estimate for next year's earnings over the last 30 days [11] Vertiv Holdings Co. (VRT) - VRT is a leading provider of critical digital infrastructure for data centers and is benefiting from strong market demand and an extensive product portfolio [12][13] - The company is strategically expanding its capacity to meet the growing demand for AI-enabled solutions and has made acquisitions to enhance its service capabilities [13][14] - Expected revenue and earnings growth rates for VRT are 20.7% and 26.3%, respectively, for the next year, with a 6.8% improvement in the Zacks Consensus Estimate for next year's earnings over the last 30 days [15] Mirion Technologies Inc. (MIR) - MIR provides radiation detection and monitoring products and is focused on expanding its reach in the nuclear energy sector [16] - The company is integrating digital technologies into its radiation safety solutions and has recently partnered with Westinghouse Electric Company [17] - Expected revenue and earnings growth rates for MIR are 24.7% and 26.5%, respectively, for the next year, with a 1.6% improvement in the Zacks Consensus Estimate for next year's earnings over the last 30 days [18] BWX Technologies Inc. (BWXT) - BWXT manufactures nuclear components and is benefiting from strong bookings and government contracts, particularly in the nuclear sector [19][20] - The company's total backlog reached $7.4 billion, up 119% year over year, driven by robust federal demand and a growing pipeline [21] - Expected revenue and earnings growth rates for BWXT are 14.5% and 9.9%, respectively, for the next year, with a 0.2% improvement in the Zacks Consensus Estimate for next year's earnings over the last seven days [24] EMCOR Group Inc. (EME) - EME is a leading provider of critical infrastructure to AI-powered data centers, focusing on electrical infrastructure and cooling systems [25] - The company is gaining traction in the data center construction market, which is contributing to its expanding performance obligations [26][27] - Expected revenue and earnings growth rates for EME are 5.9% and 8.6%, respectively, for the next year, with a 1.2% improvement in the Zacks Consensus Estimate for next year's earnings over the last 30 days [28]