NN, Inc. (NASDAQ: NNBR) saw its stock price rocket 39.47% to $3.8493 by 10:06 a.m. EDT Monday, as investors piled into shares following the announcement of new liquid-cooling orders destined for NVIDIA Corporation's (NASDAQ: NVDA) AI data center racks. The explosive move came on volume of approximately 56.3 million shares, dwarfing the 65-day average of just 1.0 million shares and representing a turnover of about 121% of the company's public float of 46.5 million shares.
The sheer magnitude of the trading activity underscores the market's intense interest in NN's pivot toward the high-growth data center cooling market. According to data from The Wall Street Journal and MarketWatch, short interest stood at 2.09 million shares as of June 15, representing a mere 3.7% of the morning's trading volume. This suggests that the rally was driven primarily by new buying rather than short covering, although the massive volume relative to float indicates significant institutional and retail participation.
Liquid-Cooling Orders and Guidance
NN confirmed that the latest NVIDIA-related liquid-cooling contracts are already included within its 2026 new-wins forecast of $80 million to $90 million. The company emphasized that any adjustments to its 2026 and 2027 sales or EBITDA outlooks will be communicated, if necessary, when it reports second-quarter results in early August. This clarification helped temper speculation that the new deals would materially boost near-term financial projections.
NN has pre-sold all capacity for 52 dedicated machines that will manufacture liquid-cooled data center products. This batch comprises 50 production lines and two sample machines, with 47 of them destined for the company's Wuxi plant in China. The Wuxi facility is strategically positioned to supply NVIDIA's Asian supply chain, covering markets in China, Taiwan, and Vietnam.
Strategic Shift and CEO Commentary
Harold Bevis, NN's president and CEO, highlighted the company's transformation, stating that it has "tripled the size" of its product line and is "building a meaningful position" in liquid-cooled AI systems. As part of this strategic pivot, NN has retooled five of its automotive CNC production centers to begin manufacturing components for data centers, aligning with its broader plan to exit commodity automotive products.
The market's enthusiasm for NN's data center exposure is reflected in its investor deck, which shows Electric Grid & Data Center as the company's second-largest market, with trailing 12-month revenue of $73 million and a near-term goal of reaching $100 million. Meanwhile, global automotive sales have declined to 44% of total revenue as of Q1 2026, down from 65% in 2023, illustrating the company's successful diversification away from the cyclical auto sector.
Index Removal and Market Context
The positive news came against a backdrop of index pressure. S&P Capital IQ reported at 9:02 a.m. EDT that NNBR had been removed from the Russell Microcap Value Benchmark Index. Despite this removal, the stock continued to climb, gaining 36.96% at the time of the announcement. The resilience of the stock price in the face of index deletion suggests that investors are focused on the company's fundamental transformation rather than passive fund flows.
Segment Performance and Outlook
NN's Power Solutions segment, which encompasses grid and data center operations, delivered strong results in the first quarter. Sales jumped 27.3% to $55.4 million, while adjusted operating income surged 81.8% to $10.0 million, up from $5.5 million in the prior year. In contrast, Mobile Solutions sales edged up just 1.4% to $63.1 million, with adjusted operating income declining to $1.3 million from $1.6 million, highlighting the divergent performance between NN's growth and legacy businesses.
Overall, NN posted first-quarter sales of $118.5 million, a 12.1% year-over-year gain, and adjusted EBITDA of $14.1 million, up 33%. The company raised its full-year outlook in May, now projecting sales of $450 million to $470 million, adjusted EBITDA of $52 million to $62 million, and new business wins in the range of $80 million to $90 million. The morning's rally added approximately $57 million to NN's equity value since Friday's close, reflecting investor confidence in the company's strategic direction and its ability to capitalize on the booming AI infrastructure buildout.
