Applied Optoelectronics (NASDAQ:AAOI) Shares Up 11.7% - Still a Buy?

Key Points

• Shares jumped 11.7% intraday to about $94.48 on Wednesday but traded on ~62% lower-than-average volume, leaving the stock well above its 50‑day ($70.06) and 200‑day ($44.52) moving averages.
• Analysts are mixed: the consensus rating is Hold with an average target of $52.80, while individual price targets and ratings vary widely (3 Buy / 3 Hold / 1 Sell).
• The company beat quarterly revenue and EPS (revenue $134.27M, +33.9% YoY; EPS -$0.01 vs. -$0.12 est.) but remains unprofitable with negative margins, issued cautious Q1 guidance (-$0.09–$0.00), and insiders have sold sizable positions (~326,333 shares worth ~$29.4M in 90 days).

Applied Optoelectronics, Inc. (NASDAQ:AAOI - Get Free Report) shares traded up 11.7% during mid-day trading on Wednesday . The stock traded as high as $92.69 and last traded at $94.4760. 3,172,146 shares changed hands during trading, a decline of 62% from the average session volume of 8,368,006 shares. The stock had previously closed at $84.59.

Analysts Set New Price Targets

A number of brokerages have weighed in on AAOI. Rosenblatt Securities reissued a "buy" rating and set a $50.00 target price on shares of Applied Optoelectronics in a report on Thursday, February 19th. B. Riley Financial raised shares of Applied Optoelectronics from a "sell" rating to a "neutral" rating and set a $54.00 price target for the company in a report on Friday, February 27th. Needham & Company LLC increased 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. Northland Securities reissued a "market perform" rating and issued a $55.00 target price on shares of Applied Optoelectronics in a report on Friday, February 27th. Finally, Weiss Ratings restated a "sell (d-)" rating on shares of Applied Optoelectronics in a research note on Wednesday, January 21st. Three investment analysts have rated the stock with a Buy rating, three have given a Hold rating and one has assigned a Sell rating to the stock. According to MarketBeat.com, Applied Optoelectronics has a consensus rating of "Hold" and an average target price of $52.80.

Applied Optoelectronics Price Performance

The company has a market capitalization of $6.70 billion, a P/E ratio of -137.07 and a beta of 3.19. 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 business has a 50 day simple moving average of $70.06 and a 200-day simple moving average of $44.52.

Applied Optoelectronics (NASDAQ:AAOI - Get Free Report) last released its quarterly earnings results on Thursday, February 26th. The semiconductor company reported ($0.01) EPS for the quarter, topping the consensus estimate of ($0.12) by $0.11. The business had revenue of $134.27 million during the quarter, compared to analyst estimates 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 quarterly revenue was up 33.9% on a year-over-year basis. During the same quarter in the prior year, the firm earned ($0.02) earnings per share. Applied Optoelectronics has set its Q1 2026 guidance at -0.090-0.000 EPS. Analysts predict that Applied Optoelectronics, Inc. will post -1.18 EPS for the current fiscal year.

Insider Activity at Applied Optoelectronics

In other news, insider Shu-Hua (Joshua) Yeh sold 50,000 shares of the stock in a transaction on Monday, March 9th. The stock was sold at an average price of $97.10, for a total value of $4,855,000.00. Following the completion of the transaction, the insider owned 322,051 shares of the company's stock, valued at approximately $31,271,152.10. This represents a 13.44% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which can be accessed through this link. Also, Director Elizabeth G. Loboa sold 102,347 shares of the company's stock in a transaction dated Tuesday, March 3rd. The stock was sold at an average price of $95.76, for a total transaction of $9,800,748.72. Following the completion of the sale, the director directly owned 20,523 shares of the company's stock, valued at $1,965,282.48. The trade was a 83.30% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. Insiders have sold a total of 326,333 shares of company stock worth $29,392,957 in the last ninety days. 4.50% of the stock is currently owned by corporate insiders.

Institutional Investors Weigh In On Applied Optoelectronics

A number of institutional investors have recently added to or reduced their stakes in AAOI. Caitong International Asset Management Co. Ltd bought a new position in Applied Optoelectronics during the 4th quarter valued at $1,375,000. Invesco Ltd. lifted its holdings in shares of Applied Optoelectronics by 5,208.9% in the fourth quarter. Invesco Ltd. now owns 3,512,309 shares of the semiconductor company's stock valued at $122,439,000 after buying an additional 3,446,150 shares during the period. XTX Topco Ltd lifted its holdings in shares of Applied Optoelectronics by 167.6% in the fourth quarter. XTX Topco Ltd now owns 24,771 shares of the semiconductor company's stock valued at $864,000 after buying an additional 15,513 shares during the period. SummitTX Capital L.P. bought a new position in Applied Optoelectronics during the fourth quarter valued at about $254,000. Finally, Quadrature Capital Ltd acquired a new position in Applied Optoelectronics during the fourth quarter worth about $1,453,000. 61.70% of the stock is currently owned by institutional investors and hedge funds.

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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