Key Highlights

● AAON posted record second-quarter net sales of $627.0 million, up 101.2% year over year, driven by BASX and data-center cooling demand, and raised full-year sales-growth guidance to 55% to 60% while trimming gross-margin guidance to 25% to 26%.

● Franklin Electric delivered steadier second-quarter results, with net sales up 6% to $622.9 million and adjusted diluted Earnings up 18% to $1.55, and lifted its full-year outlook to net sales of $2.21 billion to $2.29 billion and adjusted earnings of $4.50 to $4.70 a share.

● The KDK ticker belongs to Kodiak AI, an AI-powered autonomous-vehicle technology company that develops the Kodiak Driver self-driving system, not an HVAC, water or lighting manufacturer despite sitting in the same roundup.

● LSI Industries grew Revenue 51.3% to $234.6 million largely through its Display Solutions expansion and the Canada's Best Holdings acquisition, though operating Margin narrowed to 6.2% from 8.6% as integration costs rose.

A data-center building boom, resilient water infrastructure spending and a slow-turning capital-equipment cycle are reshaping how investors read the industrial corner of the Nasdaq Composite this autumn. Here is what the numbers actually say about five very different names, and why one of them does not belong in the Manufacturing bucket at all.

Five Names, One Theme, Several Caveats

Industrial manufacturing rarely dominates the headlines the way megacap technology does, yet it sits underneath almost everything technology is building right now: the coils that cool a hyperscale data center, the pumps that move water, the machines that load code onto a chip. As September 2026 unfolds, a cluster of Nasdaq-listed industrials has moved sharply on that plumbing-of-the-boom story.

This roundup looks at five tickers investors have flagged: AAON (NASDAQ: AAON), Franklin Electric (NASDAQ: FELE), Data I/O (NASDAQ: DAIO), Kodiak AI (NASDAQ: KDK) and LSI Industries (NASDAQ: LYTS). Four are genuine industrial makers with recent, verifiable results. The fifth, KDK, is something else entirely, and being honest about that is part of the analysis.

The Sector Backdrop Heading Into Autumn 2026

The through-line for industrials in 2026 has been artificial intelligence, but indirectly. The scramble to build data centers has turned mechanical and electrical suppliers into growth stories, while the older cycles, water systems, retail refurbishment, Capital equipment for chip makers, move on their own clocks.

That split matters. Companies exposed to hyperscale construction have posted eye-watering growth rates, but the same Demand is straining Supply chains, compressing near-term margins and inflating valuations. Companies tied to slower end markets look duller on paper yet offer steadier compounding. And a handful of newly public, pre-profit names ride the AI narrative without the earnings to anchor it.

Reading these five together is a useful exercise precisely because they sit at different points on that spectrum.

AAON, Inc. (NASDAQ:AAON): A Data Center Cooling Story Testing Its Own Limits

AAON has become one of the clearest public proxies for data-center thermal management. In results reported on 10 August 2026, the Tulsa-based HVAC maker said second-quarter net sales rose 101.2% year over year to a record $627.0 million, with Net Income of $56.7 million and GAAP diluted earnings of $0.68 a share, up 257.9%.

The engine was its BASX-branded and data-center business. BASX sales climbed 216.2% to $345 million, and AAON reported total Backlog of roughly $2.0 billion, up 98% from a year earlier. Management, led by chief executive Matt Tobolski, raised full-year sales-growth guidance to 55% to 60% from a prior 40% to 45%.

Here is the tension worth watching closely. AAON simultaneously trimmed its gross-margin guidance to 25% to 26% from 27% to 28%, citing the cost of scaling. Despite the raise, shares fell about 10.2% the next day. The read is that investors are weighing extraordinary top-line momentum against execution risk on margins and a demanding valuation. Whether AAON can grow into that multiple is the open question.

Franklin Electric Co., Inc. (NASDAQ:FELE): The Steady Water Compounder

Franklin Electric offers a deliberate contrast in tempo. The Indiana-based maker of water and fluid-movement systems reported second-quarter results on 28 July 2026, with net sales up a comparatively modest 6% to $622.9 million and net income of $65.7 million.

Profitability, not headline growth, is the story. GAAP diluted earnings rose 11% to $1.46, while adjusted diluted earnings climbed 18% to $1.55, helped in part by a legal settlement recorded in the Energy Systems segment. All three units advanced: Water Systems rose 5% to $358.5 million, Distribution gained 11% to $221.1 million, and Energy Systems added 3% to $80.2 million. The company spent about $71.9 million on acquisitions and investments in the first half and declared a quarterly Dividend of $0.28 a share.

Franklin also lifted its full-year outlook, guiding to net sales of $2.21 billion to $2.29 billion and adjusted earnings of $4.50 to $4.70 a share. For investors, FELE reads as the low-drama, dividend-paying industrial whose appeal rests on essential water infrastructure rather than any AI narrative, a useful ballast beside the more explosive names on this list.

Data I/O Corporation (NASDAQ:DAIO): A Micro Cap Turnaround at an Inflection

Data I/O is the smallest and most speculative genuine manufacturer here. The company builds programming and secure data-provisioning systems used to load firmware and security keys onto semiconductors, and it has spent recent quarters restructuring.

For the quarter ended 30 June 2026, Data I/O reported revenue of about $5.1 million, a 59% sequential jump from the first quarter, with bookings of $4.9 million and a gross margin of 57.0%. It remained unprofitable, posting a net loss of roughly $1.6 million, or $0.17 a share, but ended the period with $10.8 million in cash, bolstered by a $9 million direct Investment closed in May 2026. Backlog stood at $2.1 million.

Chief executive William Wentworth called the quarter a clear inflection point, pointing to six new customers spanning automotive, robotics and space communications, plus early traction in edge AI. The bull case is a small, cash-cushioned company levered to automotive electronics and new AI-adjacent demand. The risk is equally plain: at this revenue scale, a single soft quarter matters, and profitability remains a forecast, not a fact.

LSI Industries Inc. (NASDAQ:LYTS): Lighting Plus a Store-Fixtures Rebuild

LSI Industries sells lighting and display solutions to grocery, convenience, petroleum and other commercial customers, and it has been reshaping itself through acquisition. In results reported on 20 August 2026, the Cincinnati company posted revenue of $234.6 million for the quarter ended 30 June 2026, up 51.3% year over year, with adjusted earnings of $0.38 a share and adjusted EBITDA of about $25.7 million.

Much of that top-line surge reflects its Display Solutions expansion, including the March 2025 Acquisition of Canada's Best Holdings, a store-fixtures maker. The trade-off showed up in profitability: Operating Margin narrowed to 6.2% from 8.6% a year earlier as integration and operating costs rose.

LSI therefore sits between AAON and Franklin Electric in character: real growth, much of it bought rather than organic, with margin pressure that management still has to prove is temporary. For investors, the questions are whether the acquired display Business can lift returns over time and how exposed LSI's project-driven revenue is to any pullback in commercial and retail refresh spending.

Kodiak AI, Inc. (NASDAQ:KDK): Not a Manufacturer, and Worth Saying So Plainly

Now the honest correction. The ticker KDK on Nasdaq is Kodiak AI, Inc., not an HVAC, water or lighting maker, but an AI-powered autonomous-vehicle technology company that develops the Kodiak Driver self-driving system for long-haul and industrial trucking and defense applications. Standard classifications place it in the Technology sector, software-infrastructure industry, not industrial manufacturing.

Kodiak became public recently and by an unusual route: it completed a business combination with Ares Acquisition Corporation II on 24 September 2025 and began trading the following day, a deal that raised more than $212 million. By early September 2026 the stock traded in the low single digits, around $3.82 on 4 September 2026.

Its industrial connection is real but oblique. Kodiak targets freight and has a collaboration with General Dynamics Land Systems for autonomous ground vehicles, so it touches trucking and defense supply chains. But it is a pre-profit, hardware-and-software platform betting on driverless adoption, a different risk profile entirely from a cash-generating equipment maker. Investors grouping it with the others should treat it as a speculative technology holding, not a manufacturing peer.

What Investors Should Watch

For AAON, the metric that matters is gross margin against that raised sales guide: the market has already signalled it will punish any sign that scaling erodes profitability faster than Volume compensates. For Franklin Electric, watch whether acquisition spending translates into durable segment growth and whether the raised full-year guide holds.

For Data I/O, the watch items are the path to profitability and whether those six new logos become repeat revenue rather than one-time wins. For LSI Industries, the question is margin recovery as the acquired fixtures business is integrated. And for Kodiak AI, the only things that matter near term are cash runway and commercial milestones on driverless deployment; earnings are not part of the story yet.

Across all five, the macro swing factors are the durability of the data-center buildout, interest-rate direction into 2027, and how tariffs and input costs move through industrial supply chains.

Four Manufacturers and One Imposter, Priced Very Differently

AAON is the high-beta data-center play testing investor patience on margins, growing sales at triple-digit rates while giving back gross-margin points to fund that scale. Franklin Electric is the steady, dividend-paying water compounder on the opposite end of the tempo spectrum. Data I/O is a micro-cap turnaround at a fragile inflection, and LSI Industries is an acquisitive lighting-and-display grower still proving its integration math.

Kodiak AI, despite the framing of the original question, is an autonomous-driving technology company, not a manufacturer at all, and treating it as one would mean applying the wrong risk lens entirely. Four of these five names genuinely make things; one makes software that drives trucks. Reading past the ticker list to what each company actually does is the difference between a useful basket and a mislabeled one.