Applied Optoelectronics (NASDAQ:AAOI) Shares Gap Up - Here's What Happened

Key Points

• Shares gapped up premarket from $103.91 to $110.05 and were last trading around $106.24 on heavy volume (~6.47M shares).
• Analysts are split but the stock has a consensus rating of "Hold" with a $52.80 consensus price target, despite some firms raising targets (e.g., Needham to $80) and three Buy / three Hold / one Sell ratings.
• Applied Optoelectronics beat quarterly estimates (EPS -$0.01 vs. -$0.12; revenue $134.27M vs. $131.56M; revenue +33.9% YoY) but remains unprofitable with weak guidance (Q1 EPS -$0.09 to $0.00) and notable insider selling (326,333 shares sold in last 90 days).

Shares of Applied Optoelectronics, Inc. (NASDAQ:AAOI - Get Free Report) gapped up before the market opened on Monday . The stock had previously closed at $103.91, but opened at $110.05. Applied Optoelectronics shares last traded at $106.2350, with a volume of 6,471,440 shares trading hands.

Analyst Ratings Changes

Several equities analysts have recently issued reports on AAOI shares. Northland Securities reaffirmed a "market perform" rating and issued a $55.00 price objective on shares of Applied Optoelectronics in a research note on Friday, February 27th. Rosenblatt Securities restated a "buy" rating and issued a $50.00 target price on shares of Applied Optoelectronics in a report on Thursday, February 19th. Weiss Ratings restated a "sell (d-)" rating on shares of Applied Optoelectronics in a research report on Wednesday, January 21st. Wall Street Zen raised Applied Optoelectronics from a "sell" rating to a "hold" rating in a research note on Sunday. Finally, Needham & Company LLC upped their target price on Applied Optoelectronics from $43.00 to $80.00 and gave the company a "buy" rating in a report on Friday, February 27th. Three equities research analysts have rated the stock with a Buy rating, three have issued a Hold rating and one has assigned a Sell rating to the company's stock. Based on data from MarketBeat.com, the company currently has a consensus rating of "Hold" and a consensus price target of $52.80.

Applied Optoelectronics Price Performance

The company has a quick ratio of 1.91, a current ratio of 2.63 and a debt-to-equity ratio of 0.18. The stock's 50 day moving average price is $73.69 and its two-hundred day moving average price is $45.97. The firm has a market capitalization of $8.37 billion, a price-to-earnings ratio of -170.39 and a beta of 3.23.

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

Insider Buying and Selling

In other news, CFO Stefan J. Murry sold 4,000 shares of Applied Optoelectronics stock in a transaction that occurred on Tuesday, March 10th. The shares were sold at an average price of $112.76, for a total value of $451,040.00. Following the transaction, the chief financial officer owned 280,070 shares of the company's stock, valued at $31,580,693.20. This trade represents a 1.41% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which can be accessed through this hyperlink. Also, insider David C. Kuo sold 29,000 shares of the business's stock in a transaction on Thursday, March 19th. The stock was sold at an average price of $100.13, for a total transaction of $2,903,770.00. Following the completion of the sale, the insider owned 82,663 shares of the company's stock, valued at $8,277,046.19. The trade was a 25.97% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Over the last ninety days, insiders have sold 326,333 shares of company stock valued at $29,392,957. 4.50% of the stock is owned by corporate insiders.

Institutional Trading of Applied Optoelectronics

Several hedge funds have recently added to or reduced their stakes in AAOI. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. grew its position in Applied Optoelectronics by 10.4% during the first quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. now owns 25,579 shares of the semiconductor company's stock worth $393,000 after buying an additional 2,415 shares in the last quarter. Cetera Investment Advisers bought a new stake in shares of Applied Optoelectronics in the 2nd quarter worth about $377,000. Legal & General Group Plc grew its stake in Applied Optoelectronics by 46.5% during the second quarter. Legal & General Group Plc now owns 64,744 shares of the semiconductor company's stock worth $1,663,000 after buying an additional 20,563 shares during the last quarter. Rhumbline Advisers increased its holdings in Applied Optoelectronics by 28.6% during the 2nd quarter. Rhumbline Advisers now owns 78,475 shares of the semiconductor company's stock valued at $2,016,000 after purchasing an additional 17,458 shares in the last quarter. Finally, New York State Common Retirement Fund increased its stake in shares of Applied Optoelectronics by 36.0% in the second quarter. New York State Common Retirement Fund now owns 17,000 shares of the semiconductor company's stock valued at $437,000 after buying an additional 4,500 shares in the last quarter. 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.

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