Woodward, Inc. (NASDAQ: WWD), a designer and manufacturer of control and energy system solutions, shares are rocking up 19% on July 16, 2025, without any real company news but with its new bread-and-butter opportunities in a booming artificial intelligence (AI) data centre market and a strong aerospace sector coming back. The company’s shares have jumped more than 50% over the last three months, compared with gains on broader market indices and its peers in the industry.
Uncover the reasons behind Woodward stock surge, fueled by AI data center innovations and aerospace prospects. Get insights into future growth potential.
The AI Boom: How the Next Industrial Revolution Is Being Driven by Data Centre Demand
One of the key drivers of Woodward’s recent rise has been its central role in enabling energy-hungry AI data centres. Although Woodward has long been recognised for its aerospace products, the company’s industrial segment is leveraging the increasing demand for dependable power generation and control systems at these essential installations.
In particular, the company’s reciprocating engine division is proving more attractive as big internal combustion engines become more prevalent in base-load generation and critical backup power at AI data centres and microgrid applications.
That places Woodward squarely in the infrastructure build-out driving the AI revolution. Its controls serve the hydro-turbine, steam-turbine (including fossil, nuclear, ultra-supercritical and geothermal), gas-turbine and centrifugal compressor (including pipelines and injection and removal storage and retrieval) markets, along with other power generation solution applications requiring power up to 700 megawatts.
Aerospace Soars: Commercial Rebound And Defense Spending
At the same time, Woodward’s legacy aerospace business is rocking and rolling with solid recovery in commercial aviation and heightened global defence spending. The company makes crucial fuel systems, actuators and controls for commercial and military aircraft and supplies industry giants like Boeing and Airbus.
Recent highlights include:
- 52% increase in defence OEM (Original Equipment Manufacturer) sales in Q2 fiscal 2025 driven by increasing global military budgets.
- A 23% spike in commercial aftermarket sales in Q2, meaning more use and maintenance of older aircraft.
- Prominent Airbus contract to provide the electro-hydraulic spoiler actuation system for the A350 aircraft, deepening Woodward’s presence on advanced new commercial aircraft.
- A partnership with Boeing and NASA on a new fuel-efficient aircraft that will be compatible with the aviation industry’s net-zero emissions aspirations.
“Woodward’s precision components are in high demand and at the centre of what makes flight possible, and we see this continuing well into the next decade.
Strong Performance and Positive Financial Outlook
Woodward has fared well financially, posting net sales of $884 million in its second fiscal quarter of 2025, a 6% increase from the year-ago period and topping Wall Street analysts’ estimates. Adjusted earnings per share (EPS) also beat expectations.
The company has raised its fiscal year 2025 sales guidance to be in the range of $3.375 billion to $3.500 billion, which reflects the company’s confidence in its ability to maintain growth. Analysts are optimistic about the company, and several of them rate it as a “buy” or “hold”, noting that the company has positioned itself well in the market and performs well in the segment.
The company competes with other industrial and aerospace giants and wide-ranging economic concerns such as tariffs, but its diversified portfolio and critical role in high-growth sectors set it up well for further growth. Investors will be listening to Woodward’s Q3 fiscal 2025 earnings report on July 28 for more details regarding its performance and strategic direction.
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