Applied Optoelectronics (NASDAQ:AAOI) Stock Price Down 8.4% - Here's Why

Key Points

• Applied Optoelectronics shares fell 8.4% on Friday, trading as low as $101.52 after closing at $112.02 the prior session. Trading volume was also far below average, with about 1.22 million shares changing hands versus a 10.39 million average.
• Recent analyst commentary was mixed, but the stock currently carries an average Hold rating and a consensus price target of $141.80. Rosenblatt and Needham maintained or reiterated bullish views, while other firms issued more cautious ratings.
• The company’s latest earnings missed expectations, posting -$0.07 EPS versus estimates for a smaller loss, even though revenue rose 51.3% year over year. Applied Optoelectronics also reported notable insider selling in recent months, including large share sales by directors and executives.

Shares of Applied Optoelectronics, Inc. (NASDAQ:AAOI - Get Free Report) traded down 8.4% on Friday . The company traded as low as $101.52 and last traded at $102.6640. Approximately 1,219,122 shares changed hands during trading, a decline of 88% from the average session volume of 10,389,458 shares. The stock had previously closed at $112.02.

Analyst Upgrades and Downgrades

A number of analysts recently issued reports on the stock. Rosenblatt Securities restated a "buy" rating and issued a $220.00 price target on shares of Applied Optoelectronics in a research note on Monday, June 22nd. Needham & Company LLC decreased their price objective on shares of Applied Optoelectronics from $260.00 to $220.00 and set a "buy" rating for the company in a report on Wednesday. Raymond James Financial reissued an "outperform" rating on shares of Applied Optoelectronics in a research report on Wednesday, June 10th. Weiss Ratings restated a "sell (d-)" rating on shares of Applied Optoelectronics in a research note on Tuesday, July 7th. Finally, Wall Street Zen cut shares of 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, two have given a Hold rating and one has assigned a Sell rating to the company. Based on data from MarketBeat.com, the stock currently has an average rating of "Hold" and an average price target of $141.80.

Applied Optoelectronics Price Performance

The stock has a market capitalization of $8.29 billion, a P/E ratio of -157.89 and a beta of 3.69. The company has a 50 day moving average of $152.29 and a 200-day moving average of $113.19. The company has a quick ratio of 3.03, a current ratio of 3.83 and a debt-to-equity ratio of 0.18.

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 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 for the quarter, compared to the consensus estimate of $156.98 million. During the same quarter in the previous year, the firm earned ($0.02) EPS. The firm's revenue for the quarter was up 51.3% on a year-over-year basis. Applied Optoelectronics has set its Q2 2026 guidance at -0.030-0.030 EPS. Sell-side analysts predict that Applied Optoelectronics, Inc. will post 0.6 EPS for the current year.

Insider Buying and Selling

In other news, Director Cynthia Delaney sold 56,575 shares of the company's 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 transaction was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through the SEC website. Also, insider Hung-Lun (Fred) Chang sold 40,329 shares of the stock in a transaction that occurred on Wednesday, June 17th. The stock was sold at an average price of $170.60, for a total value of $6,880,127.40. Following the sale, the insider owned 286,124 shares in the company, valued at $48,812,754.40. The trade was a 12.35% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders sold a total of 500,215 shares of company stock valued at $86,658,774 over the last 90 days. 3.80% of the stock is owned by corporate insiders.

Institutional Investors Weigh In On Applied Optoelectronics

Several large investors have recently added to or reduced their stakes in the stock. Tema ETFs LLC acquired a new position in shares of Applied Optoelectronics during the second quarter valued at $62,000. Allworth Financial LP increased its holdings in shares of Applied Optoelectronics by 1,923.7% in the 4th quarter. Allworth Financial LP now owns 769 shares of the semiconductor company's stock worth $27,000 after acquiring an additional 731 shares during the period. NFSG Corp bought a new stake in Applied Optoelectronics in the 1st quarter valued at about $85,000. Comerica Bank acquired a new position in Applied Optoelectronics during the 3rd quarter valued at about $28,000. Finally, Northwestern Mutual Wealth Management Co. grew its position in Applied Optoelectronics by 166.7% in 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. 61.70% of the stock is 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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