Several Positive Drivers Boosted AAON (AAON) in Q3

Conestoga Capital Advisors, an asset management company, released its third-quarter 2025 investor letter. A copy of the letter can be downloaded here. Equity markets continued their momentum that began in early April, reaching new all-time highs in the third quarter. In the quarter, the Conestoga Small Cap Composite returned -1.4% net-of-fees, underperforming the Russell 2000 Growth Index’s impressive 12.2% gain. Most of the Index’s gains come from low-quality stock leadership, where unprofitable, high-beta names have considerably outperformed. Please check the top 5 holdings of the fund for a better understanding of their best picks for 2025.

In its third-quarter 2025 investor letter, Conestoga Capital Advisors highlighted stocks such as AAON, Inc. (NASDAQ:AAON). AAON, Inc. (NASDAQ:AAON), with a market capitalization of $7.928 billion, engages in engineering, manufacturing, marketing, and selling air conditioning and heating equipment. The one-month return of AAON, Inc. (NASDAQ:AAON) was 4.63%, and its shares lost 11.45% of their value over the last 52 weeks. On October 17, 2025, AAON, Inc. (NASDAQ:AAON) stock closed at $97.24 per share.

Conestoga Capital Advisors stated the following regarding AAON, Inc. (NASDAQ:AAON) in its third quarter 2025 investor letter:

“AAON, Inc. (NASDAQ:AAON) designs and manufactures highly engineered, energy-efficient commercial and industrial HVAC systems. AAON’s 2Q results again initially disappointed investors but investors ultimately viewed it as a clearing event. The company’s year-to-date results have been adversely impacted by sluggish demand in its core rooftop HVAC business, manufacturing inefficiencies caused by an ERP implementation and expansion expenses of its Memphis, TN manufacturing facility. The stock’s positive reaction is a function of the company’s continued strong backlog of $1.1 billion, the substantial growth of the BASX business (which manufactures cooling equipment for the data center market) and a stabilization of the manufacturing operations as ERP implementation has been less of a drag on output.”

Why AAON Inc (AAON) Is Plunging in 2025?

AAON, Inc. (NASDAQ:AAON) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 29 hedge fund portfolios held AAON, Inc. (NASDAQ:AAON) at the end of the second quarter, up from 18 in the previous quarter. AAON, Inc.’s (NASDAQ:AAON) net sales in the quarter declined year-over-year $2 million to $311.6 million. While we acknowledge the risk and potential of AAON, Inc. (NASDAQ:AAON) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than AAON, Inc. (NASDAQ:AAON) and that has 10,000% upside potential, check out our report about this cheapest AI stock.

In another article, we covered AAON, Inc. (NASDAQ:AAON) and shared Conestoga Capital Advisors’ views on the company in the previous quarter. In addition, please check out our hedge fund investor letters Q3 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.