Applied Optoelectronics (NASDAQ:AAOI) Trading Down 5.2% - Here's What Happened

Key Points

• Applied Optoelectronics shares fell 5.2% on Friday, trading as low as $166.66 and closing at $167.7030 on much lighter-than-normal volume.
• The company’s latest quarterly results missed expectations, with EPS of -$0.07 versus a -$0.05 estimate and revenue of $151.14 million versus $156.98 million expected, even though sales were up 51.3% year over year.
• Analysts remain mixed on AAOI, with ratings ranging from buy to sell and an average target price of $79.80; meanwhile, insiders recently sold shares, largely tied to tax withholding on vested equity awards.

Shares of Applied Optoelectronics, Inc. (NASDAQ:AAOI - Get Free Report) fell 5.2% during trading on Friday . The stock traded as low as $166.66 and last traded at $167.7030. 2,171,396 shares were traded during mid-day trading, a decline of 78% from the average session volume of 9,789,837 shares. The stock had previously closed at $176.81.

Analysts Set New Price Targets

Several brokerages have commented on AAOI. Rosenblatt Securities reaffirmed a "buy" rating and issued a $50.00 price objective on shares of Applied Optoelectronics in a research report on Thursday, February 19th. Northland Securities reaffirmed a "market perform" rating and issued a $55.00 price objective on shares of Applied Optoelectronics in a research report on Friday, February 27th. Needham & Company LLC lifted their price objective on shares of Applied Optoelectronics from $43.00 to $80.00 and gave the stock a "buy" rating in a research report on Friday, February 27th. B. Riley Financial raised shares of Applied Optoelectronics from a "sell" rating to a "neutral" rating and set a $54.00 price objective on the stock in a research report on Friday, February 27th. Finally, Raymond James Financial reaffirmed an "outperform" rating and issued a $160.00 price objective on shares of Applied Optoelectronics in a research report on Friday, May 8th. Three research analysts have rated the stock with a Buy rating, three have assigned a Hold rating and one has issued a Sell rating to the stock. Based on data from MarketBeat, Applied Optoelectronics currently has an average rating of "Hold" and an average target price of $79.80.

Applied Optoelectronics Trading Up 0.3%

The firm's 50-day moving average price is $137.65 and its 200-day moving average price is $74.99. The company has a quick ratio of 3.03, a current ratio of 3.83 and a debt-to-equity ratio of 0.18. The company has a market cap of $14.23 billion, a P/E ratio of -269.10 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 (EPS) 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 during the quarter, compared to the consensus estimate of $156.98 million. During the same period last year, the firm earned ($0.02) EPS. The business'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. As a group, equities research analysts expect that Applied Optoelectronics, Inc. will post 0.66 earnings per share for the current fiscal year.

Insider Buying and Selling

In related news, insider Shu-Hua (Joshua) Yeh sold 39,154 shares of the company's stock in a transaction that occurred on Tuesday, May 19th. The shares were sold at an average price of $173.26, for a total transaction of $6,783,822.04. Following the sale, the insider owned 462,430 shares of the company's stock, valued at approximately $80,120,621.80. This represents a 7.81% decrease in their position. The transaction was disclosed in a legal filing 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, CEO Chih-Hsiang (Thompson) Lin sold 58,000 shares of the company's stock in a transaction that occurred on 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 sale, the chief executive officer directly owned 2,255,693 shares in the company, valued at $390,821,369.18. This trade represents a 2.51% decrease in their position. The disclosure for this sale is available in the SEC filing. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Over the last quarter, insiders have sold 459,324 shares of company stock valued at $59,068,951. Corporate insiders own 3.80% of the company's stock.

Institutional Trading of Applied Optoelectronics

A number of hedge funds and other institutional investors have recently bought and sold shares of AAOI. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. increased 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 acquiring an additional 2,415 shares during the period. Cetera Investment Advisers bought a new stake in Applied Optoelectronics during the 2nd quarter worth approximately $377,000. New York State Common Retirement Fund increased its holdings in Applied Optoelectronics by 36.0% during the 2nd quarter. New York State Common Retirement Fund now owns 17,000 shares of the semiconductor company's stock worth $437,000 after acquiring an additional 4,500 shares during the period. Invesco Ltd. increased its holdings in Applied Optoelectronics by 50.0% during the 2nd quarter. Invesco Ltd. now owns 60,817 shares of the semiconductor company's stock worth $1,562,000 after acquiring an additional 20,261 shares during the period. Finally, First Trust Advisors LP bought a new stake in Applied Optoelectronics during the 2nd quarter worth approximately $952,000. 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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