Applied Optoelectronics (NASDAQ:AAOI) Shares Down 7.6% - What's Next?

Key Points

• Applied Optoelectronics shares fell 7.6% during intraday trading, dipping to as low as $110.09 and closing near $110.81, well below the previous close of $119.92.
• Analysts remain split on AAOI: Rosenblatt kept a buy rating with a $220 target, while others issued sell ratings, leaving the stock with a consensus Hold and average price target of $113.80.
• The company’s latest earnings missed expectations, with EPS of -$0.07 versus -$0.05 expected and revenue of $151.14 million versus $156.98 million forecast, even though revenue still rose 51.3% year over year.

Shares of Applied Optoelectronics, Inc. (NASDAQ:AAOI - Get Free Report) fell 7.6% during mid-day trading on Monday . The company traded as low as $110.09 and last traded at $110.8070. Approximately 1,186,543 shares traded hands during mid-day trading, a decline of 89% from the average session volume of 10,513,644 shares. The stock had previously closed at $119.92.

Analyst Upgrades and Downgrades

Several analysts have weighed in on the company. Rosenblatt Securities reaffirmed a "buy" rating and set a $220.00 target price on shares of Applied Optoelectronics in a research note on Monday, June 22nd. Wall Street Zen lowered Applied Optoelectronics from a "hold" rating to a "sell" rating in a report on Monday, April 13th. Weiss Ratings restated a "sell (d-)" rating on shares of Applied Optoelectronics in a research note on Tuesday, July 7th. Finally, Raymond James Financial reaffirmed an "outperform" rating on shares of Applied Optoelectronics in a report on Wednesday, June 10th. Three research analysts have rated the stock with a Buy rating, two have given a Hold rating and one has assigned a Sell rating to the company's stock. Based on data from MarketBeat.com, the stock has a consensus rating of "Hold" and a consensus target price of $113.80.

Applied Optoelectronics Stock Down 6.3%

The company has a quick ratio of 3.03, a current ratio of 3.83 and a debt-to-equity ratio of 0.18. The firm has a market cap of $9.02 billion, a price-to-earnings ratio of -170.46 and a beta of 3.69. The stock's 50 day moving average is $165.01 and its 200 day moving average is $108.59.

Applied Optoelectronics (NASDAQ:AAOI - Get Free Report) last announced 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 for the quarter, compared to the consensus estimate of $156.98 million. Applied Optoelectronics had a negative return on equity of 4.64% and a negative net margin of 8.55%.Applied Optoelectronics's revenue for the quarter was up 51.3% on a year-over-year basis. During the same period in the previous year, the firm earned ($0.02) EPS. Applied Optoelectronics has set its Q2 2026 guidance at -0.030-0.030 EPS. Analysts forecast that Applied Optoelectronics, Inc. will post 0.6 EPS for the current year.

Insider Buying and Selling

In other news, CEO Chih-Hsiang (Thompson) Lin sold 59,000 shares of the company's stock in a transaction on Friday, June 12th. The stock was sold at an average price of $166.53, for a total value of $9,825,270.00. Following the completion of the sale, the chief executive officer owned 1,302,436 shares in the company, valued at $216,894,667.08. This represents a 4.33% decrease in their ownership of the stock. 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, insider David C. Kuo sold 29,227 shares of Applied Optoelectronics stock in a transaction dated Friday, June 12th. The stock was sold at an average price of $166.53, for a total value of $4,867,172.31. Following the transaction, the insider directly owned 149,078 shares in the company, valued at approximately $24,825,959.34. The trade was a 16.39% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The sale was made to cover tax withholding obligations related to the vesting of equity awards. In the last ninety days, insiders have sold 496,215 shares of company stock worth $86,170,414. 3.80% of the stock is owned by corporate insiders.

Hedge Funds Weigh In On Applied Optoelectronics

Several large investors have recently made changes to their positions in the business. Invesco Ltd. grew its position in Applied Optoelectronics by 5,208.9% in the fourth quarter. Invesco Ltd. now owns 3,512,309 shares of the semiconductor company's stock worth $122,439,000 after buying an additional 3,446,150 shares during the last quarter. Price T Rowe Associates Inc. MD increased its holdings in shares of Applied Optoelectronics by 5,321.6% in 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 buying an additional 2,188,630 shares in the last quarter. Morgan Stanley lifted its position in shares of Applied Optoelectronics by 157.1% during the 4th quarter. Morgan Stanley now owns 1,699,855 shares of the semiconductor company's stock valued at $59,257,000 after acquiring an additional 1,038,775 shares during the last quarter. Hawk Ridge Capital Management LP lifted its position in shares of Applied Optoelectronics by 106.2% during 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, Artemis Investment Management LLP bought a new stake in shares of Applied Optoelectronics during the 4th quarter worth $26,923,000. 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.

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