Applied Optoelectronics (NASDAQ:AAOI) Hits New 1-Year High – Still a Buy?

Applied Optoelectronics, Inc. (NASDAQ:AAOI) shares hit a new 52-week high on Tuesday . The stock traded as high as $49.13 and last traded at $47.91, with a volume of 5953298 shares traded. The stock had previously closed at $44.30.

Applied Optoelectronics News Summary

Here are the key news stories impacting Applied Optoelectronics this week:

• Positive Sentiment: Analyst support remains constructive — several brokers have kept Buy ratings or raised targets this winter, providing a bullish backdrop that helps justify current valuation levels for AAOI. Read More.
• Neutral Sentiment: Reported short‑interest headlines claim a “large increase,” but published values show 0/NaN and a 0.0 days‑to‑cover ratio — this appears to be a reporting error; no clear short‑seller pressure is confirmed until corrected data are posted. Read More.
• Neutral Sentiment: Institutional ownership is high (~61.7%) and the stock is trading near its 52‑week high with the 50‑ and 200‑day moving averages well below current price — supportive technically but increases sensitivity to profit‑taking around these levels. Read More.
• Negative Sentiment: Insider selling by senior management: CFO Stefan Murry sold a total of ~18,020 shares across Feb. 10–11 (~$49–$50.25), trimming his stake. The SEC filing is posted. This kind of executive selling amid a price peak can weigh on near‑term sentiment. Read More.
• Negative Sentiment: Director David C. Kuo sold roughly ~20,000 shares across Feb. 10–11 (~$50 avg), a meaningful reduction in his holding; multiple insider sales in quick succession are being read as profit‑taking and are likely contributing to the stock decline. Read More.

Wall Street Analyst Weigh In

A number of equities analysts have commented on AAOI shares. Weiss Ratings reissued a “sell (d-)” rating on shares of Applied Optoelectronics in a research note on Wednesday, January 21st. B. Riley Financial reaffirmed a “sell” rating and issued a $15.00 price target on shares of Applied Optoelectronics in a report on Monday, November 10th. Rosenblatt Securities reiterated a “buy” rating and issued a $50.00 price target on shares of Applied Optoelectronics in a research report on Friday, December 19th. Northland Securities set a $45.00 price objective on Applied Optoelectronics in a research report on Thursday, December 11th. Finally, Needham & Company LLC raised their price objective on Applied Optoelectronics from $38.00 to $43.00 and gave the company a “buy” rating in a research note on Thursday, December 11th. Four investment analysts have rated the stock with a Buy rating, one has assigned a Hold rating and two have issued a Sell rating to the company’s stock. According to data from MarketBeat.com, Applied Optoelectronics presently has a consensus rating of “Hold” and a consensus target price of $35.60.

Applied Optoelectronics Stock Performance

The company has a debt-to-equity ratio of 0.23, a current ratio of 2.31 and a quick ratio of 1.63. The stock has a market capitalization of $3.00 billion, a PE ratio of -13.66 and a beta of 3.32. The firm has a fifty day moving average price of $37.23 and a two-hundred day moving average price of $30.28.

Insiders Place Their Bets

In related news, CFO Stefan J. Murry sold 11,693 shares of Applied Optoelectronics stock in a transaction dated Wednesday, February 11th. The shares were sold at an average price of $50.25, for a total transaction of $587,573.25. Following the completion of the sale, the chief financial officer owned 290,050 shares in the company, valued at $14,575,012.50. This trade represents a 3.88% decrease in their position. The sale was disclosed in a filing with the SEC, which is available through the SEC website. Also, insider David C. Kuo sold 17,467 shares of the business’s stock in a transaction dated Wednesday, February 11th. The shares were sold at an average price of $50.17, for a total transaction of $876,319.39. Following the completion of the sale, the insider directly owned 111,663 shares of the company’s stock, valued at approximately $5,602,132.71. This trade represents a 13.53% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. In the last quarter, insiders sold 66,520 shares of company stock worth $3,080,367. Insiders own 4.50% of the company’s stock.

Institutional Trading of Applied Optoelectronics

Several institutional investors and hedge funds have recently modified their holdings of AAOI. CloudAlpha Capital Management Limited Hong Kong boosted its holdings in shares of Applied Optoelectronics by 410.7% in the second quarter. CloudAlpha Capital Management Limited Hong Kong now owns 1,408,983 shares of the semiconductor company’s stock valued at $36,197,000 after purchasing an additional 1,133,115 shares during the period. Hawk Ridge Capital Management LP bought a new stake in Applied Optoelectronics during the 3rd quarter valued at $21,392,000. Artemis Investment Management LLP bought a new stake in Applied Optoelectronics during the 4th quarter valued at $26,923,000. Alyeska Investment Group L.P. purchased a new stake in shares of Applied Optoelectronics in the 3rd quarter worth $19,738,000. Finally, Vanguard Group Inc. grew its position in shares of Applied Optoelectronics by 13.6% during the 3rd quarter. Vanguard Group Inc. now owns 4,624,570 shares of the semiconductor company’s stock worth $119,915,000 after buying an additional 551,910 shares in the last quarter. Institutional investors own 61.70% of the company’s stock.

About Applied Optoelectronics

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.