Applied Optoelectronics (NASDAQ:AAOI) Shares Up 8.7% - Here's Why

Key Points

• Shares jumped 8.7% intraday to as high as $179.03 (last at $178.61) on Friday, despite trading volume being about 58% below the recent average.
• Analyst coverage is mixed (three Buy, three Hold, one Sell) with an unusually low consensus target of $52.80, leaving a large gap between price targets and the current market price.
• The company beat Q4 estimates (EPS -$0.01 vs. -$0.12 expected) with revenue up 33.9% year-over-year, but still shows a negative net margin (-8.39%) and provided Q1 guidance of -$0.09 to $0.00 EPS while insiders have sold ~314,333 shares (~$29.3M) over the last three months.

Applied Optoelectronics, Inc. (NASDAQ:AAOI - Get Free Report) shot up 8.7% during mid-day trading on Friday . The company traded as high as $179.03 and last traded at $178.6070. 3,877,061 shares were traded during trading, a decline of 58% from the average session volume of 9,291,248 shares. The stock had previously closed at $164.36.

Analysts Set New Price Targets

A number of research firms recently issued reports on AAOI. B. Riley Financial upgraded shares of Applied Optoelectronics from a "sell" rating to a "neutral" rating and set a $54.00 price objective for the company in a report on Friday, February 27th. Northland Securities restated a "market perform" rating and set a $55.00 price objective on shares of Applied Optoelectronics in a report on Friday, February 27th. Rosenblatt Securities restated a "buy" rating and set a $50.00 price objective on shares of Applied Optoelectronics in a report on Thursday, February 19th. Wall Street Zen downgraded shares of Applied Optoelectronics from a "hold" rating to a "sell" rating in a report on Monday, April 13th. Finally, Weiss Ratings restated a "sell (d-)" rating on shares of Applied Optoelectronics in a report on Wednesday, January 21st. Three 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 stock has an average rating of "Hold" and an average target price 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 has a market cap of $14.89 billion, a P/E ratio of -285.86 and a beta of 3.23. The business's 50-day simple moving average is $112.47 and its two-hundred day simple moving average is $61.13.

Applied Optoelectronics (NASDAQ:AAOI - Get Free Report) last issued its 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 firm 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 last year, the business earned ($0.02) earnings per share. Applied Optoelectronics has set its Q1 2026 guidance at -0.090-0.000 EPS. Sell-side analysts expect that Applied Optoelectronics, Inc. will post 0.66 EPS for the current year.

Insider Activity

In other news, Director Elizabeth G. Loboa sold 102,347 shares of the firm's stock in a transaction that occurred on Tuesday, March 3rd. The shares were sold at an average price of $95.76, for a total value of $9,800,748.72. Following the completion of the transaction, the director directly owned 20,523 shares in the company, valued at approximately $1,965,282.48. This trade represents a 83.30% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through the SEC website. Also, insider Shu-Hua (Joshua) Yeh sold 50,000 shares of the firm's stock in a transaction that occurred on Monday, March 9th. The shares were sold at an average price of $97.10, for a total transaction of $4,855,000.00. Following the completion of the transaction, the insider owned 322,051 shares of the company's stock, valued at $31,271,152.10. This trade represents a 13.44% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Over the last three months, insiders have sold 314,333 shares of company stock valued at $29,262,106. 4.50% of the stock is currently owned by corporate insiders.

Hedge Funds Weigh In On Applied Optoelectronics

A number of large investors have recently modified their holdings of AAOI. Invesco Ltd. boosted its position 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 acquiring an additional 3,446,150 shares during the period. Price T Rowe Associates Inc. MD boosted its position in shares of Applied Optoelectronics by 5,321.6% in the fourth quarter. Price T Rowe Associates Inc. MD now owns 2,229,757 shares of the semiconductor company's stock valued at $77,730,000 after acquiring an additional 2,188,630 shares during the period. Morgan Stanley boosted its position in shares of Applied Optoelectronics by 157.1% in the fourth quarter. Morgan Stanley now owns 1,699,855 shares of the semiconductor company's stock valued at $59,257,000 after acquiring an additional 1,038,775 shares during the period. Hawk Ridge Capital Management LP boosted its position in shares of Applied Optoelectronics by 106.2% in the fourth quarter. Hawk Ridge Capital Management LP now owns 1,700,900 shares of the semiconductor company's stock valued at $59,293,000 after acquiring an additional 875,903 shares during the period. Finally, Artemis Investment Management LLP bought a new position in shares of Applied Optoelectronics in the fourth quarter valued at approximately $26,923,000. 61.70% of the stock is currently owned by institutional investors.

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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