Applied Optoelectronics (NASDAQ:AAOI) Trading Down 7.1% - What's Next?

Key Points

• Shares fell 7.1% to about $139.92 on Wednesday (trading as low as $145.55) on volume of ~1.78M shares, an 81% drop from its average daily volume of 9.23M.
• Analysts are mixed: MarketBeat shows a consensus "Hold" rating with a consensus price target of $52.80 (three Buy, three Hold, one Sell), a target materially below the current share price.
• The company reported revenue up 33.9% year‑over‑year and an EPS beat, but still has negative net margin and ROE, gave Q1 2026 guidance of -0.090 to 0.000 EPS, and insiders sold 326,333 shares in the last three months.

Applied Optoelectronics, Inc. (NASDAQ:AAOI - Get Free Report) shares dropped 7.1% on Wednesday . The company traded as low as $145.55 and last traded at $139.9230. Approximately 1,782,751 shares were traded during mid-day trading, a decline of 81% from the average daily volume of 9,230,093 shares. The stock had previously closed at $150.57.

Analysts Set New Price Targets

AAOI has been the subject of a number of recent analyst reports. Rosenblatt Securities restated a "buy" rating and set a $50.00 price target on shares of Applied Optoelectronics in a report on Thursday, February 19th. Weiss Ratings restated a "sell (d-)" rating on shares of Applied Optoelectronics in a report on Wednesday, January 21st. B. Riley Financial upgraded shares of Applied Optoelectronics from a "sell" rating to a "neutral" rating and set a $54.00 price target for the company in a report on Friday, February 27th. Wall Street Zen downgraded shares of Applied Optoelectronics from a "hold" rating to a "sell" rating in a report on Monday, April 13th. Finally, Northland Securities restated a "market perform" rating and set a $55.00 price target on shares of Applied Optoelectronics in a report on Friday, February 27th. Three equities research analysts have rated the stock with a Buy rating, three have given a Hold rating and one has issued a Sell rating to the company's stock. Based on data from MarketBeat.com, the stock has a consensus rating of "Hold" and a consensus target price of $52.80.

Applied Optoelectronics Price Performance

The stock's fifty day moving average price is $97.79 and its 200-day moving average price is $55.71. The firm has a market cap of $11.33 billion, a price-to-earnings ratio of -221.09 and a beta of 3.23. The company has a current ratio of 2.63, a quick ratio of 1.91 and a debt-to-equity ratio of 0.18.

Applied Optoelectronics (NASDAQ:AAOI - Get Free Report) last announced its quarterly earnings results on Thursday, February 26th. The semiconductor company reported ($0.01) earnings per share (EPS) for the quarter, topping analysts' consensus estimates of ($0.12) by $0.11. Applied Optoelectronics had a negative net margin of 8.39% and a negative return on equity of 5.29%. The business had revenue of $134.27 million during the quarter, compared to the consensus estimate of $131.56 million. During the same quarter last year, the firm earned ($0.02) EPS. The business's revenue was up 33.9% compared to the same quarter last year. Applied Optoelectronics has set its Q1 2026 guidance at -0.090-0.000 EPS. As a group, equities research analysts forecast that Applied Optoelectronics, Inc. will post 0.66 earnings per share for the current fiscal year.

Insider Transactions at Applied Optoelectronics

In related news, CFO Stefan J. Murry sold 4,000 shares of Applied Optoelectronics stock in a transaction that occurred on Friday, April 10th. The shares were sold at an average price of $136.50, for a total value of $546,000.00. Following the completion of the sale, the chief financial officer owned 276,070 shares in the company, valued at approximately $37,683,555. This trade represents a 1.43% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Director Min-Chu (Mike) Chen sold 8,835 shares of Applied Optoelectronics stock in a transaction that occurred on Monday, March 9th. The shares were sold at an average price of $108.72, for a total transaction of $960,541.20. Following the completion of the sale, the director owned 169,300 shares of the company's stock, valued at $18,406,296. This trade represents a 4.96% decrease in their position. The disclosure for this sale is available in the SEC filing. Insiders have sold 326,333 shares of company stock worth $29,802,706 in the last three months. Company insiders own 4.50% of the company's stock.

Institutional Trading of Applied Optoelectronics

Institutional investors have recently added to or reduced their stakes in the stock. Cinctive Capital Management LP acquired a new stake in Applied Optoelectronics in the 3rd quarter valued at approximately $800,000. Diker Management LLC acquired a new position in shares of Applied Optoelectronics in the third quarter worth $519,000. Vanguard Group Inc. grew its stake in shares of Applied Optoelectronics by 13.6% in the third quarter. Vanguard Group Inc. now owns 4,624,570 shares of the semiconductor company's stock worth $119,915,000 after acquiring an additional 551,910 shares in the last quarter. AI Squared Management Ltd acquired a new position in shares of Applied Optoelectronics in the third quarter worth $5,043,000. Finally, Trilogy Capital Inc. acquired a new position in shares of Applied Optoelectronics in the fourth quarter worth $235,000. Institutional investors and hedge funds 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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