Carrier's data center and HVAC orders surge, but margins and China lag
Data center orders explode, driving raised outlook Carrier's data center orders jumped over 300% in Q2, prompting it to raise 2026 data center sales forecast to ~$2 billion from $1.5 billion. Total orders rose ~40% and commercial HVAC orders ~65%, with backlog over $8 billion. This strong demand signals future revenue growth, pushing the stock up.
This is the core new driver: surging orders and raised guidance directly lift investor expectations for future sales.
Q2 earnings beat and full-year guidance raised Carrier reported adjusted Q2 earnings of $0.86 per share on revenue of $6.35 billion, beating forecasts, and raised full-year guidance to ~$2.90 per share and ~$23 billion revenue. The beat and raise show business strength, boosting investor confidence and the stock price.
The earnings beat and guidance raise are new positive financial results that directly affect valuation.
Profit falls and margins squeezed by costs and tariffs Q2 profit dropped to $501 million from $591 million a year earlier, and adjusted operating margin fell 190 basis points to 17.2% due to input-cost pressure and unfavorable mix. New tariffs add margin pressure. Weaker profitability weighs on the stock.
This is the main counterweight: despite strong orders, actual profits declined and margins are under pressure.
European heatwaves could boost long-term HVAC demand Citi analysts say European heatwaves may drive long-term demand for cooling, with only ~20% of European households having air conditioning. Carrier has the greatest exposure, with over one-fifth of revenue from Climate Solutions Europe and strong heat-pump sales. This potential growth supports the stock.
This new analyst view highlights a long-term demand opportunity that could lift future sales for Carrier.