Shares of leading thermal management solutions provider Modine Manufacturing (MOD +17.17%) are 16% higher as of 1 p.m. ET today after the company announced a major $4 billion deal with a hyperscaler customer. The data center customer will use Modine’s Airedale cooling solutions to support the incredible ongoing infrastructure build-out tied to the AI boom. The $4 billion will cover work scheduled for 2027 through 2029 and includes a $165 million upfront payment to help “support capacity investments and other expenditures needed to meet its commitments.”
Today’s Change
(17.17%) $44.73
Current Price
$305.25
Key Data Points
Market Cap
$14B
Day’s Range
$300.28 – $322.77
52wk Range
$86.48 – $322.77
Volume
86.7K
Avg Vol
1M
Gross Margin
23.97%
I think the market’s positive reaction to this news makes sense for a couple of reasons. First, the deal shows they’re not only a leader in the climate solutions industry (HVAC and heat transfer solutions), but also in the booming data center space. It looks like a major vote of confidence from a big-time customer. Neil Brinker, Chief Executive Officer, explained, “This landmark agreement is a testament to the successful execution of our long-term strategy to grow our Data Centers business and validates our position as a technology leader.”
Image source: Getty Images.
Second, the size of the deal is simply massive, considering that Modine’s data center sales in 2025 were only about $700 million, and this deal will be somewhere around $1.3 billion annually starting in 2027. This data center unit just grew sales by 78% in Modine’s most recent quarter, and management believed it would hit $2 billion in revenue by 2028 — before today’s news.
As Modine plans to spin off its lower-margin performance technologies unit by the fourth quarter of 2026, the company will become a “true” growth stock, generating the bulk of its sales from data center cooling solutions. Following today’s jump, Modine trades at 41 times forward earnings and 34 times EBITDA, so the stock is far from traditionally “cheap.” However, if you believe the ongoing AI boom and data center build-out is more than a short-term cyclical peak and is instead a decade-long (or more) run, Modine could be a stellar growth stock to consider if it keeps landing deals like these.
