Applied Optoelectronics (NASDAQ:AAOI) Trading 7.9% Higher - Still a Buy?

Key Points

• Applied Optoelectronics shares rose sharply in midday trading, climbing about 7.9% to as high as $175.07 as volume came in well below average.
• Analyst sentiment is mixed: the stock carries a consensus rating of “Hold” with a consensus price target of $79.80, despite some bullish calls such as Raymond James’ $160 target.
• Recent earnings were weaker than expected, with the company missing EPS and revenue estimates even though revenue jumped 51.3% year over year; insiders also sold a meaningful amount of stock in the last quarter.

Applied Optoelectronics, Inc. (NASDAQ:AAOI - Get Free Report)'s share price was up 7.9% during mid-day trading on Thursday . The company traded as high as $175.07 and last traded at $178.3210. Approximately 1,716,336 shares were traded during trading, a decline of 82% from the average daily volume of 9,773,253 shares. The stock had previously closed at $165.26.

Analyst Ratings Changes

A number of equities research analysts have issued reports on AAOI shares. Rosenblatt Securities reiterated a "buy" rating and set a $50.00 price objective on shares of Applied Optoelectronics in a research note on Thursday, February 19th. Weiss Ratings reiterated a "sell (d-)" rating on shares of Applied Optoelectronics in a research note on Wednesday, January 21st. Raymond James Financial reiterated an "outperform" rating and set a $160.00 price objective on shares of Applied Optoelectronics in a research note on Friday, May 8th. Wall Street Zen downgraded shares of Applied Optoelectronics from a "hold" rating to a "sell" rating in a research note on Monday, April 13th. Finally, Northland Securities reiterated a "market perform" rating and set a $55.00 price objective on shares of Applied Optoelectronics in a research note on Friday, February 27th. 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. Based on data from MarketBeat.com, the stock currently has a consensus rating of "Hold" and a consensus price target of $79.80.

Applied Optoelectronics Trading Up 6.0%

The business's 50 day moving average price is $136.52 and its two-hundred day moving average price is $74.00. The company has a current ratio of 3.83, a quick ratio of 3.03 and a debt-to-equity ratio of 0.18. The company has a market capitalization of $14.05 billion, a price-to-earnings ratio of -265.22 and a beta of 3.76.

Applied Optoelectronics (NASDAQ:AAOI - Get Free Report) last posted its quarterly earnings results on Thursday, May 7th. The semiconductor company reported ($0.07) earnings per share for the quarter, missing analysts' consensus estimates 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 company had revenue of $151.14 million during the quarter, compared to analyst estimates of $156.98 million. During the same quarter in the previous year, the business posted ($0.02) earnings per share. The company'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. On average, equities analysts predict that Applied Optoelectronics, Inc. will post 0.66 earnings per share for the current fiscal year.

Insiders Place Their Bets

In related news, 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 value of $4,855,000.00. Following the completion of the transaction, the insider owned 322,051 shares in the company, valued at $31,271,152.10. This trade represents a 13.44% decrease in their position. The sale was disclosed in a filing with the Securities & Exchange Commission, which is available through this hyperlink. Also, insider Hung-Lun (Fred) Chang sold 36,400 shares of the firm's stock in a transaction that occurred on Monday, March 16th. The shares were sold at an average price of $100.25, for a total transaction of $3,649,100.00. Following the completion of the transaction, the insider 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 position. The SEC filing for this sale provides additional information. Insiders have sold 459,324 shares of company stock worth $59,068,951 over the last quarter. 3.80% of the stock is currently owned by corporate insiders.

Institutional Inflows and Outflows

Large investors have recently added to or reduced their stakes in the business. Geneos Wealth Management Inc. raised its holdings in Applied Optoelectronics by 1.4% during the 1st quarter. Geneos Wealth Management Inc. now owns 18,072 shares of the semiconductor company's stock worth $1,529,000 after purchasing an additional 243 shares during the last quarter. Comerica Bank raised its holdings in Applied Optoelectronics by 27.6% during the 4th quarter. Comerica Bank now owns 1,386 shares of the semiconductor company's stock worth $48,000 after purchasing an additional 300 shares during the last quarter. AlphaQuest LLC raised its holdings in Applied Optoelectronics by 7.9% during the 3rd quarter. AlphaQuest LLC now owns 7,503 shares of the semiconductor company's stock worth $195,000 after purchasing an additional 551 shares during the last quarter. Police & Firemen s Retirement System of New Jersey raised its holdings in Applied Optoelectronics by 3.6% during the 4th quarter. Police & Firemen s Retirement System of New Jersey now owns 16,073 shares of the semiconductor company's stock worth $560,000 after purchasing an additional 556 shares during the last quarter. Finally, Allworth Financial LP raised its holdings in 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. Institutional investors own 61.70% of the company's stock.

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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