Applied Optoelectronics (NASDAQ:AAOI) Trading Up 10.6% – Should You Buy?

Applied Optoelectronics, Inc. (NASDAQ:AAOI) shares rose 10.6% during trading on Thursday . The company traded as high as $199.41 and last traded at $203.5680. Approximately 6,122,460 shares traded hands during mid-day trading, a decline of 38% from the average daily volume of 9,948,419 shares. The stock had previously closed at $184.07.

Wall Street Analyst Weigh In

AAOI has been the topic of several recent analyst reports. Needham & Company LLC lifted their target price on Applied Optoelectronics from $43.00 to $80.00 and gave the stock a “buy” rating in a report on Friday, February 27th. Northland Securities reaffirmed a “market perform” rating and set a $55.00 price target on shares of Applied Optoelectronics in a research report on Friday, February 27th. Rosenblatt Securities reiterated a “buy” rating and set a $50.00 price objective on shares of Applied Optoelectronics in a report on Thursday, February 19th. Raymond James Financial reiterated an “outperform” rating and issued a $160.00 price objective on shares of Applied Optoelectronics in a research report on Friday, May 8th. Finally, B. Riley Financial raised Applied Optoelectronics from a “sell” rating to a “neutral” rating and set a $54.00 target price for the company in a research note on Friday, February 27th. Three research analysts have rated the stock with a Buy rating, three have given a Hold rating and one has given a Sell rating to the company. According to data from MarketBeat, Applied Optoelectronics presently has an average rating of “Hold” and an average price target of $79.80.

Applied Optoelectronics Stock Performance

The stock has a fifty day moving average of $152.29 and a 200-day moving average of $84.67. The firm has a market capitalization of $16.42 billion, a P/E ratio of -309.72 and a beta of 3.66. The company has a quick ratio of 3.03, a current ratio of 3.83 and a debt-to-equity ratio of 0.18.

Applied Optoelectronics (NASDAQ:AAOI) last released its earnings results on Thursday, May 7th. The semiconductor company reported ($0.07) EPS for the quarter, missing the consensus estimate of ($0.05) by ($0.02). The firm had revenue of $151.14 million during the quarter, compared to the consensus estimate of $156.98 million. Applied Optoelectronics had a negative net margin of 8.55% and a negative return on equity of 4.64%. The company’s revenue was up 51.3% on a year-over-year basis. During the same quarter in the previous year, the firm posted ($0.02) EPS. Applied Optoelectronics has set its Q2 2026 guidance at -0.030-0.030 EPS. On average, research analysts anticipate that Applied Optoelectronics, Inc. will post 0.6 EPS for the current year.

Insiders Place Their Bets

In other Applied Optoelectronics news, CEO Chih-Hsiang (Thompson) Lin sold 58,000 shares of the business’s stock in a transaction dated Tuesday, May 19th. The shares were sold at an average price of $173.26, for a total transaction of $10,049,080.00. Following the sale, the chief executive officer directly owned 2,255,693 shares of the company’s stock, valued at $390,821,369.18. The trade was a 2.51% decrease in their position. The sale was disclosed in a filing with the SEC, which is available through this link. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, CFO Stefan J. Murry sold 33,000 shares of the business’s stock in a transaction dated Tuesday, May 19th. The stock was sold at an average price of $173.26, for a total transaction of $5,717,580.00. Following the sale, the chief financial officer directly owned 451,906 shares in the company, valued at $78,297,233.56. This trade represents a 6.81% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Insiders have sold a total of 389,321 shares of company stock valued at $57,608,524 over the last 90 days. 3.80% of the stock is currently owned by company insiders.

Hedge Funds Weigh In On Applied Optoelectronics

Several hedge funds have recently modified their holdings of AAOI. Invesco Ltd. increased its position in shares of Applied Optoelectronics by 5,208.9% in the fourth quarter. Invesco Ltd. now owns 3,512,309 shares of the semiconductor company’s stock valued at $122,439,000 after acquiring an additional 3,446,150 shares during the last quarter. Price T Rowe Associates Inc. MD boosted its position in Applied Optoelectronics by 5,321.6% during the fourth quarter. Price T Rowe Associates Inc. MD now owns 2,229,757 shares of the semiconductor company’s stock valued at $77,730,000 after purchasing an additional 2,188,630 shares during the last quarter. Morgan Stanley boosted its position in Applied Optoelectronics by 157.1% during the fourth quarter. Morgan Stanley now owns 1,699,855 shares of the semiconductor company’s stock valued at $59,257,000 after purchasing an additional 1,038,775 shares during the last quarter. Hawk Ridge Capital Management LP grew its stake in Applied Optoelectronics by 106.2% in the fourth quarter. Hawk Ridge Capital Management LP now owns 1,700,900 shares of the semiconductor company’s stock valued at $59,293,000 after purchasing an additional 875,903 shares in the last quarter. Finally, Artemis Investment Management LLP bought a new position in Applied Optoelectronics in the fourth quarter valued at approximately $26,923,000. Institutional investors own 61.70% of the company’s stock.

Applied Optoelectronics Company Profile

Applied Optoelectronics, Inc develops and manufactures high-speed fiber-optic networking products designed to support the growing bandwidth demands of data centers, telecommunications carriers and internet content providers. The company’s core offerings include pluggable optical transceiver modules, transponders and optical components that enable data transmission at rates ranging from 1G to 400G. These products are used to facilitate long-haul, metro and intra-data center connectivity, addressing the need for scalable, low-latency and energy-efficient solutions in modern network infrastructures.

The company’s product portfolio spans small-form factor pluggable modules such as SFP+, QSFP+ and QSFP28 units, as well as more advanced form factors like CFP2 and OSFP for ultra-high-speed applications.