Applied Optoelectronics (NASDAQ:AAOI) Shares Gap Up - What's Next?

Key Points

• Applied Optoelectronics shares gapped up sharply, opening at $171.79 after closing at $162.88 and later trading around $181.32. The move came on heavy volume of more than 4.3 million shares.
• Analyst sentiment is mixed, with a consensus “Hold” rating and an average price target of $79.80, though several firms recently raised targets as high as $160. One analyst also downgraded the stock to Sell.
• The company’s latest earnings missed expectations, with EPS of -$0.07 versus a -$0.05 estimate and revenue of $151.14 million below forecast. Despite that, revenue still rose 51.3% year over year, while insiders have been selling shares recently.

Applied Optoelectronics, Inc. (NASDAQ:AAOI - Get Free Report) shares gapped up prior to trading on Wednesday . The stock had previously closed at $162.88, but opened at $171.79. Applied Optoelectronics shares last traded at $181.3160, with a volume of 4,331,511 shares traded.

Analysts Set New Price Targets

A number of analysts have commented on the company. Rosenblatt Securities restated a "buy" rating and issued a $50.00 price target on shares of Applied Optoelectronics in a research report on Thursday, February 19th. Needham & Company LLC upped their price target on Applied Optoelectronics from $43.00 to $80.00 and gave the stock a "buy" rating in a research report on Friday, February 27th. Raymond James Financial restated an "outperform" rating and issued a $160.00 price target on shares of Applied Optoelectronics in a research report on Friday, May 8th. Northland Securities restated a "market perform" rating and issued a $55.00 price target on shares of Applied Optoelectronics in a research report on Friday, February 27th. Finally, Wall Street Zen cut Applied Optoelectronics from a "hold" rating to a "sell" rating in a research report on Monday, April 13th. Three research analysts have rated the stock with a Buy rating, three have assigned a Hold rating and one has given a Sell rating to the company's stock. According to MarketBeat.com, the company has a consensus rating of "Hold" and an average price target of $79.80.

Applied Optoelectronics Price Performance

The company has a debt-to-equity ratio of 0.18, a current ratio of 3.83 and a quick ratio of 3.03. The firm has a 50-day moving average of $158.60 and a 200-day moving average of $89.28. The stock has a market cap of $13.67 billion, a PE ratio of -254.99 and a beta of 3.66.

Applied Optoelectronics (NASDAQ:AAOI - Get Free Report) last released its earnings results on Thursday, May 7th. The semiconductor company reported ($0.07) earnings per share (EPS) for the quarter, missing the consensus estimate of ($0.05) by ($0.02). Applied Optoelectronics had a negative return on equity of 4.64% and a negative net margin of 8.55%.The business had revenue of $151.14 million for the quarter, compared to analysts' expectations of $156.98 million. During the same quarter in the prior year, the business posted ($0.02) EPS. The business's revenue for the quarter was up 51.3% compared to the same quarter last year. Applied Optoelectronics has set its Q2 2026 guidance at -0.030-0.030 EPS. Research analysts predict that Applied Optoelectronics, Inc. will post 0.6 EPS for the current year.

Insider Activity

In related news, Director Cynthia Delaney sold 56,575 shares of the stock in a transaction that occurred on Tuesday, May 26th. The stock was sold at an average price of $189.23, for a total transaction of $10,705,687.25. Following the completion of the transaction, the director directly owned 59,647 shares of the company's stock, valued at approximately $11,287,001.81. This represents a 48.68% decrease in their ownership of the stock. The sale was disclosed in a filing with the Securities & Exchange Commission, which is accessible through this link. Also, insider Shu-Hua (Joshua) Yeh sold 10,000 shares of the stock in a transaction that occurred on Thursday, June 4th. The shares were sold at an average price of $205.07, for a total value of $2,050,700.00. Following the transaction, the insider directly owned 452,430 shares of the company's stock, valued at approximately $92,779,820.10. The trade was a 2.16% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Insiders have sold a total of 331,233 shares of company stock valued at $54,021,670 in the last three months. 3.80% of the stock is currently owned by insiders.

Hedge Funds Weigh In On Applied Optoelectronics

Hedge funds and other institutional investors have recently added to or reduced their stakes in the company. Cinctive Capital Management LP bought a new position in Applied Optoelectronics during the third quarter valued at approximately $800,000. Diker Management LLC bought a new position in Applied Optoelectronics during the third quarter valued at approximately $519,000. Vanguard Group Inc. boosted its stake in Applied Optoelectronics by 13.6% during the third quarter. Vanguard Group Inc. now owns 4,624,570 shares of the semiconductor company's stock valued at $119,915,000 after buying an additional 551,910 shares during the last quarter. Penn Capital Management Company LLC lifted its stake in shares of Applied Optoelectronics by 4.7% in the 4th quarter. Penn Capital Management Company LLC now owns 446,032 shares of the semiconductor company's stock valued at $15,565,000 after purchasing an additional 20,077 shares during the last quarter. Finally, 1492 Capital Management LLC bought a new stake in shares of Applied Optoelectronics in the 4th quarter valued at approximately $7,529,000. 61.70% of the stock is owned by institutional investors.

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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