Applied Optoelectronics (NASDAQ:AAOI) Shares Up 6.9% - Should You Buy?

Key Points

• Shares jumped 6.9% to about $152 intraday (well above the analysts' average target of $52.80) while trading volume was sharply below average, signaling a pronounced valuation gap versus sell‑side expectations.
• Applied Optoelectronics reported a quarterly beat with EPS of -$0.01 vs. -$0.12 expected and revenue up 33.9% y/y to $134.3M, but guided Q1 to -$0.09–$0.00 and analysts still expect a full‑year EPS of -$1.18.
• Insiders sold aggressively (326,333 shares worth $29.8M in the last quarter) while insiders own 4.5% and institutional investors hold 61.7%, suggesting mixed conviction among company insiders versus institutions.

Applied Optoelectronics, Inc. (NASDAQ:AAOI - Get Free Report) shot up 6.9% during mid-day trading on Thursday . The company traded as high as $146.94 and last traded at $152.3760. 1,379,176 shares were traded during trading, a decline of 85% from the average session volume of 9,231,042 shares. The stock had previously closed at $142.55.

Analyst Ratings Changes

Several research firms recently weighed in on AAOI. Northland Securities reiterated a "market perform" rating and issued a $55.00 target price on shares of Applied Optoelectronics in a report on Friday, February 27th. Rosenblatt Securities reiterated a "buy" rating and issued a $50.00 target price on shares of Applied Optoelectronics in a report on Thursday, February 19th. Needham & Company LLC lifted their target price on shares of Applied Optoelectronics from $43.00 to $80.00 and gave the company a "buy" rating in a report on Friday, February 27th. Wall Street Zen downgraded shares of Applied Optoelectronics from a "hold" rating to a "sell" rating in a report on Monday. Finally, B. Riley Financial upgraded shares of Applied Optoelectronics from a "sell" rating to a "neutral" rating and set a $54.00 target price for the company in a report on Friday, February 27th. Three research analysts have rated the stock with a Buy rating, three have issued a Hold rating and one has issued a Sell rating to the stock. According to data from MarketBeat, the stock currently has a consensus rating of "Hold" and an average target price of $52.80.

Applied Optoelectronics Price Performance

The company has a debt-to-equity ratio of 0.18, a quick ratio of 1.91 and a current ratio of 2.63. The company has a market cap of $11.04 billion, a PE ratio of -226.73 and a beta of 3.23. The company's 50-day simple moving average is $88.75 and its 200 day simple moving average is $51.86.

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

Insider Buying and Selling at Applied Optoelectronics

In other news, Director Min-Chu (Mike) Chen sold 8,835 shares of Applied Optoelectronics stock in a transaction 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 sale, the director directly owned 169,300 shares of the company's stock, valued at approximately $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 accessible through the SEC website. Also, insider Hung-Lun (Fred) Chang sold 36,400 shares of Applied Optoelectronics stock in a transaction on Monday, March 16th. The stock was sold at an average price of $100.25, for a total transaction of $3,649,100.00. Following the sale, the insider directly owned 233,618 shares of the company's stock, valued at approximately $23,420,204.50. This trade represents a 13.48% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. In the last quarter, insiders sold 326,333 shares of company stock worth $29,802,706. 4.50% of the stock is currently owned by company insiders.

Institutional Investors Weigh In On Applied Optoelectronics

Institutional investors have recently modified their holdings of the company. Allworth Financial LP lifted its position in shares of Applied Optoelectronics by 1,923.7% during the 4th quarter. Allworth Financial LP now owns 769 shares of the semiconductor company's stock worth $27,000 after purchasing an additional 731 shares during the last quarter. Comerica Bank purchased a new stake in shares of Applied Optoelectronics during the 3rd quarter worth $28,000. Northwestern Mutual Wealth Management Co. lifted its position in shares of Applied Optoelectronics by 166.7% during the 4th quarter. Northwestern Mutual Wealth Management Co. now owns 1,200 shares of the semiconductor company's stock worth $42,000 after purchasing an additional 750 shares during the last quarter. Kohmann Bosshard Financial Services LLC purchased a new stake in shares of Applied Optoelectronics during the 4th quarter worth $55,000. Finally, Headlands Technologies LLC purchased a new stake in shares of Applied Optoelectronics during the 2nd quarter worth $57,000. 61.70% of the stock is owned by hedge funds and other 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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