Applied Optoelectronics (NASDAQ:AAOI) Stock Rating Upgraded by Wall Street Zen

Key Points

• Wall Street Zen upgraded Applied Optoelectronics from “sell” to “hold.” Overall analyst sentiment remains mixed, with a consensus “hold” rating and an average price target of $134, despite targets ranging from $151 to $220.
• Second-quarter results exceeded expectations: EPS was $0.06 versus the $0.02 consensus, while revenue rose 86.3% year over year to $191.92 million. Growth was driven by strong data-center demand for 800G optical products.
• Near-term outlook is mixed. Management’s Q3 EPS guidance of $0.11–$0.26 is below the roughly $0.27 analyst consensus, with component shortages limiting production, while insiders sold approximately $87.4 million of shares over the past 90 days.

Applied Optoelectronics (NASDAQ:AAOI - Get Free Report) was upgraded by analysts at Wall Street Zen from a "sell" rating to a "hold" rating in a research report issued to clients and investors on Saturday.

A number of other analysts have also issued reports on AAOI. Raymond James Financial set a $151.00 price objective on shares of Applied Optoelectronics in a research note on Friday. Weiss Ratings restated a "sell (d-)" rating on shares of Applied Optoelectronics in a research note on Tuesday, July 7th. B. Riley Financial reaffirmed a "neutral" rating on shares of Applied Optoelectronics in a report on Friday. Rosenblatt Securities reaffirmed a "buy" rating and set a $220.00 price target on shares of Applied Optoelectronics in a research note on Friday. Finally, Needham & Company LLC cut their price objective on shares of Applied Optoelectronics from $220.00 to $190.00 and set a "buy" rating on the stock in a report on Friday. Three analysts have rated the stock with a Buy rating, two have issued a Hold rating and one has given a Sell rating to the company. Based on data from MarketBeat.com, the stock has an average rating of "Hold" and a consensus target price of $134.00.

Applied Optoelectronics Stock Up 9.2%

Shares of NASDAQ AAOI opened at $135.63 on Friday. The stock has a fifty day moving average price of $137.34 and a 200 day moving average price of $118.14. The company has a market cap of $10.88 billion, a P/E ratio of -173.88 and a beta of 3.76. Applied Optoelectronics has a 12-month low of $18.50 and a 12-month high of $233.67. The company has a current ratio of 3.83, a quick ratio of 3.03 and a debt-to-equity ratio of 0.18.

Applied Optoelectronics (NASDAQ:AAOI - Get Free Report) last posted its earnings results on Thursday, August 6th. The semiconductor company reported $0.06 earnings per share (EPS) for the quarter, beating analysts' consensus estimates of $0.02 by $0.04. The business had revenue of $191.92 million during the quarter, compared to analyst estimates of $190.48 million. Applied Optoelectronics had a negative return on equity of 2.52% and a negative net margin of 9.57%.The company's revenue for the quarter was up 86.3% compared to the same quarter last year. During the same quarter last year, the firm earned ($0.16) earnings per share. Applied Optoelectronics has set its Q3 2026 guidance at 0.110-0.260 EPS. Research analysts anticipate that Applied Optoelectronics will post 0.6 EPS for the current fiscal year.

Insider Transactions at Applied Optoelectronics

In other Applied Optoelectronics news, insider Hung-Lun (Fred) Chang sold 40,329 shares of the stock in a transaction 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 transaction, the insider directly owned 286,124 shares in the company, valued at $48,812,754.40. This represents a 12.35% decrease in their position. The transaction was disclosed in a legal filing with the SEC, which is available through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider David C. Kuo sold 29,227 shares of the business's stock in a transaction dated Friday, June 12th. The stock was sold at an average price of $166.53, for a total transaction of $4,867,172.31. Following the completion of the sale, the insider directly owned 149,078 shares of the company's stock, valued at $24,825,959.34. The trade was a 16.39% decrease in their position. The SEC filing for this sale provides additional information. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Insiders sold a total of 506,215 shares of company stock valued at $87,409,447 over the last ninety days. 3.80% of the stock is currently owned by corporate insiders.

Institutional Trading of Applied Optoelectronics

Hedge funds and other institutional investors have recently bought and sold shares of the company. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. lifted its holdings in Applied Optoelectronics by 10.4% during the 1st quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. now owns 25,579 shares of the semiconductor company's stock worth $393,000 after buying an additional 2,415 shares during the last quarter. Cetera Investment Advisers bought a new stake in shares of Applied Optoelectronics in the 2nd quarter valued at approximately $377,000. New York State Common Retirement Fund increased its holdings in shares of Applied Optoelectronics by 36.0% in the 2nd quarter. New York State Common Retirement Fund now owns 17,000 shares of the semiconductor company's stock valued at $437,000 after acquiring an additional 4,500 shares during the last quarter. Invesco Ltd. raised its position in shares of Applied Optoelectronics by 50.0% during the 2nd quarter. Invesco Ltd. now owns 60,817 shares of the semiconductor company's stock valued at $1,562,000 after acquiring an additional 20,261 shares in the last quarter. Finally, First Trust Advisors LP acquired a new stake in shares of Applied Optoelectronics during the 2nd quarter valued at approximately $952,000. 61.70% of the stock is owned by institutional investors.

More Applied Optoelectronics News

Here are the key news stories impacting Applied Optoelectronics this week:

• Positive Sentiment: Q2 results exceeded expectations: Applied Optoelectronics reported adjusted EPS of $0.06 versus consensus estimates near $0.02–$0.03. Revenue reached approximately $191.9 million, ahead of estimates and up about 86% year over year from $103 million. Applied Optoelectronics Q2 Earnings Beat Estimates, Revenues Up Y/Y
• Positive Sentiment: AI datacenter demand is accelerating: Growth was driven by datacenter products, including rapidly expanding 800G optical transceivers. Management is also increasing capacity for 800G and 1.6T products, with demand reportedly exceeding available supply through at least mid-2027. AAOI Q2 Earnings Call Focuses on Capacity-Led 800G Ramp
• Positive Sentiment: Analyst support and industry momentum helped sentiment: Rosenblatt Securities reaffirmed its “buy” rating and assigned a $220 price target. Photonics and optics companies also benefited from strong sector earnings and expectations that potential U.S. restrictions on Chinese optical-transceiver imports could reduce overseas competition. Benzinga analyst rating report
• Neutral Sentiment: Expansion is being limited by supply: Management said it could sell more products if it had greater manufacturing capacity. Component shortages are expected to constrain near-term growth, even as they demonstrate strong underlying demand. Applied Optoelectronics says it could sell more if it could make more
• Negative Sentiment: Q3 profit guidance disappointed: The company forecast EPS of $0.11–$0.26, below the roughly $0.27 analyst consensus, although projected revenue of $255 million–$290 million brackets consensus near $265.7 million. Analysts also flagged competition, a setback in 100G products and valuation concerns after the stock’s substantial rally. Applied Optoelectronics slides amid mixed Q2 results and guidance

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.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.

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