Applied Optoelectronics (NASDAQ:AAOI) Shares Gap Up – Still a Buy?

Applied Optoelectronics, Inc. (NASDAQ:AAOI)’s stock price gapped up prior to trading on Friday . The stock had previously closed at $39.57, but opened at $41.07. Applied Optoelectronics shares last traded at $45.6410, with a volume of 1,924,427 shares.

Applied Optoelectronics News Roundup

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

• Positive Sentiment: 800G product wins and Texas capacity build — Company announcements and reporting indicate AAOI has secured 800G orders tied to AI/datacenter customers and is scaling manufacturing in Texas to meet that demand; investors are treating this as a structural demand catalyst for higher‑margin, next‑generation optics. Applied Optoelectronics Secures 800G Order And Scales Texas For AI Demand
• Positive Sentiment: Analyst/upbeat outlook and buy recommendations — Recent coverage from retail and independent outlets highlighted an upbeat outlook and fresh buy recommendations after the company’s disclosures, supporting momentum as investors re-rate growth prospects tied to AI networking spend. Applied Optoelectronics (AAOI) Hits Nearly 8-Year High on Upbeat Outlook, Buy Reco
• Positive Sentiment: Technical breakout narrative — Independent commentary argues AAOI has cleared multi‑year moving averages (50‑ and 200‑week), signaling a structural breakout that attracted momentum buying from traders and some longer‑term investors. Applied Optoelectronics’ Breakout Is Just Beginning
• Neutral Sentiment: Coverage pieces explaining the rally — Several market writeups summarized why the stock jumped (800G wins, expansion, upgrade momentum), which amplified retail interest but doesn’t add new corporate fundamentals by itself. Why Applied Optoelectronics, Inc.’s (AAOI) Stock Is Up 17.97%
• Neutral Sentiment: Mixed signals on sustainability of the move — Zacks and other analysts note that while revenue upside and product wins are supportive, recent earnings‑estimate revisions and the company’s negative trailing margins mean the rally could be sentiment‑driven and may not yet be reflected in durable EPS improvements. Zacks Investment Ideas feature highlights: Applied Optoelectronics,Amazon, Oracle and Microsoft
• Negative Sentiment: Profit‑taking and volatility — After the run of gains and an 8‑year high, the stock experienced a sharp pullback on heavy volume as some investors took profits; expect continued intraday swings while the market digests whether 800G orders and capital expansion will translate into margin recovery and sustained earnings. Applied Optoelectronics (AAOI) falls 12.5% after 8-year high
• Neutral Sentiment: Short interest data uninformative — Recent short‑interest reporting showed anomalous/zero values and doesn’t provide a clear signal on positioning; monitor updated, reliable filings for true short‑squeeze risk. Short interest report (Jan 28)

Analyst Upgrades and Downgrades

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

Applied Optoelectronics Stock Performance

The company’s 50 day simple moving average is $33.75 and its 200 day simple moving average is $29.23. The company has a debt-to-equity ratio of 0.23, a quick ratio of 1.63 and a current ratio of 2.31. The stock has a market cap of $2.98 billion, a PE ratio of -13.54 and a beta of 3.26.

Applied Optoelectronics (NASDAQ:AAOI) last released its earnings results on Thursday, November 6th. The semiconductor company reported ($0.09) earnings per share (EPS) for the quarter, beating the consensus estimate of ($0.10) by $0.01. The company had revenue of $118.63 million during the quarter, compared to analyst estimates of $119.77 million. Applied Optoelectronics had a negative return on equity of 7.34% and a negative net margin of 36.97%.Applied Optoelectronics’s quarterly revenue was up 82.1% on a year-over-year basis. During the same period in the prior year, the company posted ($0.21) earnings per share. Applied Optoelectronics has set its Q4 2025 guidance at -0.130–0.040 EPS. Analysts expect that Applied Optoelectronics, Inc. will post -1.18 earnings per share for the current year.

Insider Transactions at Applied Optoelectronics

In other Applied Optoelectronics news, insider David C. Kuo sold 12,000 shares of the firm’s stock in a transaction on Wednesday, January 28th. The stock was sold at an average price of $45.05, for a total value of $540,600.00. Following the completion of the sale, the insider directly owned 114,636 shares of the company’s stock, valued at $5,164,351.80. This trade represents a 9.48% decrease in their ownership of the stock. The transaction was disclosed in a filing with the SEC, which is available through this link. Also, CFO Stefan J. Murry sold 934 shares of the business’s stock in a transaction dated Tuesday, January 13th. The shares were sold at an average price of $35.00, for a total value of $32,690.00. Following the completion of the sale, the chief financial officer owned 283,037 shares in the company, valued at $9,906,295. This represents a 0.33% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Insiders have sold 28,500 shares of company stock valued at $1,178,726 in the last 90 days. 4.50% of the stock is currently owned by corporate insiders.

Hedge Funds Weigh In On Applied Optoelectronics

Several hedge funds have recently bought and sold shares of the company. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. boosted its holdings in Applied Optoelectronics by 10.4% in the 1st quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. now owns 25,579 shares of the semiconductor company’s stock valued at $393,000 after purchasing an additional 2,415 shares during the period. GAMMA Investing LLC boosted its stake in Applied Optoelectronics by 85.9% during the second quarter. GAMMA Investing LLC now owns 1,785 shares of the semiconductor company’s stock valued at $46,000 after buying an additional 825 shares during the period. Chung Wu Investment Group LLC purchased a new position in Applied Optoelectronics during the second quarter worth about $344,000. KLP Kapitalforvaltning AS increased its stake in Applied Optoelectronics by 47.9% in the 2nd quarter. KLP Kapitalforvaltning AS now owns 10,500 shares of the semiconductor company’s stock worth $270,000 after acquiring an additional 3,400 shares during the last quarter. Finally, Sovereign Financial Group Inc. purchased a new stake in shares of Applied Optoelectronics in the 2nd quarter valued at about $287,000. Hedge funds and other 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.