Modine (MOD) stock surged on Tuesday alongside a new agreement for the heat transfer systems company. The company has signed a Long-Term Capacity Agreement (LTA) with one of its data center customers. Under the terms of this agreement, it will supply the customer with its Airedale cooling systems.
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The deal between Modine and the data center customer will start in 2027 and last through 2029. Over this period, Modine will supply more than $4 billion of Airedale cooling systems to the customer. The deal also came with an upfront cash payment of $165 million. Modine will use this cash to expand capacity to meet the customer’s demand.
Modine Data Centers president Art Laszlo said that this deal “highlights the strength of our Airedale technology and our ability to deliver innovative, reliable cooling solutions at scale.” He also noted that this is an exciting time for the company as it seeks to meet data center cooling demand.
How Did Modine Stock Move Today?
Modine stock was up 21.84% on Tuesday, adding to a 130.94% year-to-date rally. The stock has also climbed 181.8% over the past 12 months.
With today’s multi-year deal announcement came strong trading of MOD stock. This saw nearly 900,000 shares change hands as of this writing. This is closing in on the company’s three-month average daily trading volume of about 1.01 million shares.
It makes sense that Modine stock would rally on today’s news. The data center market has been hot lately thanks to AI. With more companies seeking AI to handle various tasks, the demand for data centers has soared. With new data centers come new cooling needs for the servers that power them. That’s where Modine comes in with its wealth of cooling solutions.
