Applied Optoelectronics (NASDAQ:AAOI) Trading 9% Higher - Should You Buy?

Key Points

• Applied Optoelectronics (NASDAQ:AAOI) rose about 9% in Thursday trading, reaching an intraday high of $125.73 and closing near $124.76, though volume was well below average.
• Analyst sentiment is mixed: Rosenblatt kept a buy rating with a $220 price target, while other firms issued hold or sell calls. Overall, MarketBeat shows an average rating of Hold and an average target price of $113.80.
• The company reported a smaller-than-expected quarterly loss and revenue that missed estimates, but revenue still grew 51.3% year over year. Insiders also sold shares recently, while institutional ownership remains high at 61.7%.

Applied Optoelectronics, Inc. (NASDAQ:AAOI - Get Free Report) rose 9% during trading on Thursday . The company traded as high as $125.73 and last traded at $124.7580. 1,930,620 shares traded hands during trading, a decline of 82% from the average session volume of 10,557,278 shares. The stock had previously closed at $114.44.

Analyst Upgrades and Downgrades

Several equities research analysts recently weighed in on AAOI shares. Rosenblatt Securities restated a "buy" rating and issued a $220.00 price target on shares of Applied Optoelectronics in a research report on Monday, June 22nd. Wall Street Zen lowered shares of Applied Optoelectronics from a "hold" rating to a "sell" rating in a research report on Monday, April 13th. Weiss Ratings reissued a "sell (d-)" rating on shares of Applied Optoelectronics in a research note on Tuesday. Finally, Raymond James Financial restated an "outperform" rating on shares of Applied Optoelectronics in a report on Wednesday, June 10th. Three 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's stock. Based on data from MarketBeat.com, the stock currently has an average rating of "Hold" and an average target price of $113.80.

Applied Optoelectronics Trading Up 5.7%

The stock has a market cap of $9.71 billion, a PE ratio of -183.05 and a beta of 3.69. 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 stock has a fifty day moving average price of $165.96 and a 200 day moving average price of $107.38.

Applied Optoelectronics (NASDAQ:AAOI - Get Free Report) last issued its quarterly earnings results on Thursday, May 7th. The semiconductor company reported ($0.07) earnings per share (EPS) for the quarter, missing analysts' consensus estimates of ($0.05) by ($0.02). The company had revenue of $151.14 million during the quarter, compared to the consensus estimate of $156.98 million. Applied Optoelectronics had a negative return on equity of 4.64% and a negative net margin of 8.55%.The firm's quarterly revenue was up 51.3% compared to the same quarter last year. During the same quarter in the prior year, the business earned ($0.02) earnings per share. Applied Optoelectronics has set its Q2 2026 guidance at -0.030-0.030 EPS. Equities analysts expect that Applied Optoelectronics, Inc. will post 0.6 EPS for the current year.

Insider Activity

In related news, CEO Chih-Hsiang (Thompson) Lin sold 59,000 shares of the company's stock in a transaction dated Friday, June 12th. The shares were sold at an average price of $166.53, for a total transaction of $9,825,270.00. Following the transaction, the chief executive officer directly owned 1,302,436 shares in the company, valued at approximately $216,894,667.08. This represents a 4.33% decrease in their position. The sale was disclosed in a document filed with the SEC, which is accessible through this hyperlink. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, insider Shu-Hua (Joshua) Yeh sold 39,154 shares of the stock in a transaction dated Tuesday, May 19th. The stock was sold at an average price of $173.26, for a total transaction of $6,783,822.04. Following the completion of the sale, the insider directly owned 462,430 shares in the company, valued at $80,120,621.80. This trade represents a 7.81% decrease in their ownership of the stock. 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 500,215 shares of company stock worth $86,716,414 in the last 90 days. Company insiders own 3.80% of the company's stock.

Hedge Funds Weigh In On Applied Optoelectronics

Large investors have recently bought and sold shares of the business. Allworth Financial LP increased its stake in Applied Optoelectronics by 1,923.7% in the fourth 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 period. Comerica Bank purchased a new stake in shares of Applied Optoelectronics during the third quarter valued at $28,000. Northwestern Mutual Wealth Management Co. grew its holdings in shares of Applied Optoelectronics by 166.7% in the fourth 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. Kohmann Bosshard Financial Services LLC purchased a new position in Applied Optoelectronics in the 4th quarter worth about $55,000. Finally, Headlands Technologies LLC purchased a new position in Applied Optoelectronics in the 2nd quarter worth about $57,000. Hedge funds and other institutional investors own 61.70% of the company's stock.

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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