Applied Optoelectronics (NASDAQ:AAOI) Trading Down 10.1% - Here's Why

Key Points

• Applied Optoelectronics shares fell 10.1% in Wednesday trading, slipping to an intraday low of $181.55 on lighter-than-usual volume before last trading near $181.96.
• Analyst views are mixed, with recent price targets ranging from $50 to $160 and the overall consensus remaining at Hold with a $79.80 target price.
• The company recently missed earnings and revenue estimates for the quarter, while insiders also sold shares in May, though those transactions were tied to tax withholding from equity award vesting.

Applied Optoelectronics, Inc. (NASDAQ:AAOI - Get Free Report) traded down 10.1% during mid-day trading on Wednesday . The company traded as low as $181.55 and last traded at $181.96. 6,308,764 shares were traded during mid-day trading, a decline of 37% from the average session volume of 9,961,274 shares. The stock had previously closed at $202.37.

Analyst Upgrades and Downgrades

A number of equities analysts recently issued reports on AAOI shares. B. Riley Financial upgraded Applied Optoelectronics from a "sell" rating to a "neutral" rating and set a $54.00 target price for the company in a research note on Friday, February 27th. Raymond James Financial restated an "outperform" rating and issued a $160.00 target price on shares of Applied Optoelectronics in a research note on Friday, May 8th. Needham & Company LLC raised their target price on Applied Optoelectronics from $43.00 to $80.00 and gave the stock a "buy" rating in a research note on Friday, February 27th. Wall Street Zen downgraded Applied Optoelectronics from a "hold" rating to a "sell" rating in a research report on Monday, April 13th. Finally, Rosenblatt Securities reaffirmed a "buy" rating and set a $50.00 price target on shares of Applied Optoelectronics in a research report on Thursday, February 19th. Three investment analysts have rated the stock with a Buy rating, three have issued a Hold rating and one has given a Sell rating to the company's stock. According to MarketBeat.com, the company currently has a consensus rating of "Hold" and a consensus price target of $79.80.

Applied Optoelectronics Price Performance

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 stock has a market capitalization of $14.68 billion, a price-to-earnings ratio of -278.84 and a beta of 3.66. The stock has a 50-day moving average price of $148.22 and a 200 day moving average price of $82.26.

Applied Optoelectronics (NASDAQ:AAOI - Get Free Report) last posted its earnings results on Thursday, May 7th. The semiconductor company reported ($0.07) EPS 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 business had revenue of $151.14 million for the quarter, compared to analyst estimates of $156.98 million. During the same quarter last year, the business earned ($0.02) earnings per share. Applied Optoelectronics's revenue was up 51.3% on a year-over-year basis. Applied Optoelectronics has set its Q2 2026 guidance at -0.030-0.030 EPS. As a group, equities research analysts expect that Applied Optoelectronics, Inc. will post 0.6 earnings per share for the current year.

Insider Activity

In related news, CFO Stefan J. Murry sold 33,000 shares of the stock in a transaction dated Tuesday, May 19th. The shares were sold at an average price of $173.26, for a total transaction of $5,717,580.00. Following the completion of the transaction, the chief financial officer directly owned 451,906 shares of the company's stock, valued at $78,297,233.56. This represents a 6.81% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which is available at this link. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, CEO Chih-Hsiang (Thompson) Lin sold 58,000 shares of the company's stock in a transaction dated Tuesday, May 19th. The stock was sold at an average price of $173.26, for a total transaction of $10,049,080.00. Following the transaction, the chief executive officer owned 2,255,693 shares in the company, valued at $390,821,369.18. The trade was a 2.51% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Insiders sold a total of 392,552 shares of company stock valued at $57,915,469 over the last ninety days. 3.80% of the stock is currently owned by company insiders.

Institutional Trading of Applied Optoelectronics

Several large investors have recently modified their holdings of the business. NewEdge Advisors LLC acquired a new stake in Applied Optoelectronics during the first quarter worth approximately $723,000. BankChampaign National Association purchased a new stake in Applied Optoelectronics during the 1st quarter worth $284,000. Janus Henderson Group PLC increased its stake in Applied Optoelectronics by 23.2% during the 1st quarter. Janus Henderson Group PLC now owns 29,755 shares of the semiconductor company's stock worth $2,518,000 after buying an additional 5,600 shares during the period. California State Teachers Retirement System increased its position in shares of Applied Optoelectronics by 23.2% in the 1st quarter. California State Teachers Retirement System now owns 70,464 shares of the semiconductor company's stock worth $5,961,000 after purchasing an additional 13,265 shares during the last quarter. Finally, Royal Bank of Canada boosted its holdings in shares of Applied Optoelectronics by 2,075.3% in the 1st quarter. Royal Bank of Canada now owns 127,971 shares of the semiconductor company's stock valued at $10,825,000 after buying an additional 122,088 shares during the period. 61.70% of the stock is currently owned by institutional investors and hedge funds.

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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