Wall Street Zen Downgrades Applied Optoelectronics (NASDAQ:AAOI) to Sell

Applied Optoelectronics (NASDAQ:AAOI) was downgraded by stock analysts at Wall Street Zen from a “hold” rating to a “sell” rating in a report issued on Saturday.

Several other equities research analysts also recently commented on AAOI. Needham & Company LLC lifted their price objective on shares of Applied Optoelectronics from $43.00 to $80.00 and gave the stock a “buy” rating in a research note on Friday, February 27th. Rosenblatt Securities reissued a “buy” rating and issued a $50.00 target price on shares of Applied Optoelectronics in a research report on Thursday, February 19th. B. Riley Financial raised Applied Optoelectronics from a “sell” rating to a “neutral” rating and set a $54.00 price target for the company in a research report on Friday, February 27th. Northland Securities reiterated a “market perform” rating and set a $55.00 price target on shares of Applied Optoelectronics in a research note on Friday, February 27th. Finally, Weiss Ratings reissued a “sell (d-)” rating on shares of Applied Optoelectronics in a report on Wednesday, January 21st. Three analysts have rated the stock with a Buy rating, three have given a Hold rating and one has issued a Sell rating to the company. According to data from MarketBeat, the company currently has a consensus rating of “Hold” and an average target price of $52.80.

Applied Optoelectronics Price Performance

Shares of AAOI stock opened at $98.21 on Friday. The company has a market capitalization of $7.39 billion, a P/E ratio of -151.09 and a beta of 3.20. The company’s 50-day simple moving average is $68.19 and its two-hundred day simple moving average is $43.45. Applied Optoelectronics has a one year low of $9.71 and a one year high of $128.96. The company has a debt-to-equity ratio of 0.18, a current ratio of 2.63 and a quick ratio of 1.91.

Applied Optoelectronics (NASDAQ:AAOI) last posted its earnings results on Thursday, February 26th. The semiconductor company reported ($0.01) EPS for the quarter, beating analysts’ consensus estimates of ($0.12) by $0.11. The business had revenue of $134.27 million for the quarter, compared to the consensus estimate of $131.56 million. Applied Optoelectronics had a negative net margin of 8.39% and a negative return on equity of 5.29%. The company’s revenue for the quarter was up 33.9% on a year-over-year basis. During the same quarter last year, the firm posted ($0.02) EPS. Applied Optoelectronics has set its Q1 2026 guidance at -0.090-0.000 EPS. As a group, equities analysts anticipate that Applied Optoelectronics will post -1.18 EPS for the current year.

Insider Activity

In other news, Director Min-Chu (Mike) Chen sold 8,835 shares of Applied Optoelectronics stock in a transaction that occurred on Monday, March 9th. The shares were sold at an average price of $108.72, for a total transaction of $960,541.20. Following the completion of the transaction, the director directly owned 169,300 shares of the company’s stock, valued at $18,406,296. The trade was a 4.96% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available through the SEC website. Also, insider Shu-Hua (Joshua) Yeh sold 50,000 shares of the firm’s stock in a transaction on Monday, March 9th. The shares were sold at an average price of $97.10, for a total transaction of $4,855,000.00. Following the sale, the insider owned 322,051 shares in the company, valued at approximately $31,271,152.10. This represents a 13.44% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. Insiders sold 326,333 shares of company stock valued at $29,392,957 over the last 90 days. Company insiders own 4.50% of the company’s stock.

Institutional Investors Weigh In On Applied Optoelectronics

Institutional investors and hedge funds have recently added to or reduced their stakes in the stock. Vanguard Group Inc. lifted its stake in shares of Applied Optoelectronics by 7.7% in the fourth quarter. Vanguard Group Inc. now owns 4,982,660 shares of the semiconductor company’s stock worth $173,696,000 after buying an additional 358,090 shares in the last quarter. Invesco Ltd. grew its stake in Applied Optoelectronics by 5,208.9% during the 4th 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 in the last quarter. Price T Rowe Associates Inc. MD raised its holdings in Applied Optoelectronics by 5,321.6% in the 4th 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 acquiring an additional 2,188,630 shares during the last quarter. Hawk Ridge Capital Management LP raised its holdings in Applied Optoelectronics by 106.2% in the 4th quarter. Hawk Ridge Capital Management LP now owns 1,700,900 shares of the semiconductor company’s stock valued at $59,293,000 after acquiring an additional 875,903 shares during the last quarter. Finally, Morgan Stanley lifted its stake in Applied Optoelectronics by 157.1% in the 4th quarter. Morgan Stanley now owns 1,699,855 shares of the semiconductor company’s stock worth $59,257,000 after purchasing an additional 1,038,775 shares in the last quarter. 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.