Applied Optoelectronics (NASDAQ:AAOI) Shares Up 8.3% - Should You Buy?

Key Points

• Applied Optoelectronics shares jumped 8.3% on Tuesday, trading as high as $110.88 after closing at $103.02 the previous session. Volume was well below average, with about 1.4 million shares changing hands versus a 10.4 million average.
• Wall Street sentiment is mixed: analysts have a consensus rating of Hold with a consensus target price of $113.80. Recent calls ranged from Rosenblatt’s $220 buy target to sell ratings from Weiss Ratings and Wall Street Zen.
• The company recently reported mixed quarterly results, missing EPS and revenue estimates but still posting 51.3% year-over-year revenue growth. Insiders also sold shares in recent months, while institutional investors remain heavily involved with about 61.7% ownership.

Applied Optoelectronics, Inc. (NASDAQ:AAOI - Get Free Report) shot up 8.3% during trading on Tuesday . The company traded as high as $110.88 and last traded at $111.5670. 1,400,201 shares changed hands during mid-day trading, a decline of 87% from the average session volume of 10,435,088 shares. The stock had previously closed at $103.02.

Wall Street Analysts Forecast Growth

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

Applied Optoelectronics Price Performance

The company has a debt-to-equity ratio of 0.18, a quick ratio of 3.03 and a current ratio of 3.83. The company has a market cap of $9.25 billion, a price-to-earnings ratio of -175.01 and a beta of 3.69. The business has a fifty day moving average price of $157.75 and a 200 day moving average price of $111.55.

Applied Optoelectronics (NASDAQ:AAOI - Get Free Report) last released its quarterly earnings data on Thursday, May 7th. The semiconductor company reported ($0.07) earnings per share for the quarter, missing the consensus estimate of ($0.05) by ($0.02). Applied Optoelectronics had a negative net margin of 8.55% and a negative return on equity of 4.64%. The business had revenue of $151.14 million during the quarter, compared to analyst estimates of $156.98 million. During the same period last year, the business earned ($0.02) earnings per share. The business's quarterly revenue 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. As a group, research analysts anticipate that Applied Optoelectronics, Inc. will post 0.6 earnings per share for the current year.

Insider Buying and Selling

In related news, insider Hung-Lun (Fred) Chang sold 40,329 shares of Applied Optoelectronics stock in a transaction that occurred on Wednesday, June 17th. The shares were sold at an average price of $170.60, for a total transaction of $6,880,127.40. Following the sale, the insider directly owned 286,124 shares of the company's stock, valued at approximately $48,812,754.40. The trade was a 12.35% decrease in their position. The sale was disclosed in a document filed with the SEC, which is available through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CFO Stefan J. Murry sold 4,000 shares of the company's stock in a transaction that occurred on Friday, July 10th. The stock was sold at an average price of $122.09, for a total transaction of $488,360.00. Following the transaction, the chief financial officer owned 380,576 shares of the company's stock, valued at approximately $46,464,523.84. This represents a 1.04% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders sold a total of 500,215 shares of company stock worth $86,658,774 in the last quarter. Corporate insiders own 3.80% of the company's stock.

Institutional Inflows and Outflows

Institutional investors have recently modified their holdings of the stock. Invesco Ltd. increased its stake 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. Price T Rowe Associates Inc. MD boosted its position in Applied Optoelectronics by 5,321.6% during the 4th quarter. Price T Rowe Associates Inc. MD now owns 2,229,757 shares of the semiconductor company's stock worth $77,730,000 after buying an additional 2,188,630 shares during the period. Morgan Stanley grew its holdings in Applied Optoelectronics by 157.1% during the 4th quarter. Morgan Stanley now owns 1,699,855 shares of the semiconductor company's stock worth $59,257,000 after acquiring an additional 1,038,775 shares during the last quarter. Hawk Ridge Capital Management LP grew its holdings in 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 worth $59,293,000 after acquiring an additional 875,903 shares during the last quarter. Finally, Artemis Investment Management LLP acquired a new position in Applied Optoelectronics in the 4th quarter valued at approximately $26,923,000. 61.70% of the stock is currently owned by institutional investors and hedge funds.

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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