Investors Purchase High Volume of Call Options on Applied Optoelectronics (NASDAQ:AAOI)

Key Points

• Unusual options activity: Traders bought 35,172 call options on AAOI—about 33% above typical daily call volume—as the stock jumped 3.7% to $147.83 on Thursday.
• Applied Optoelectronics beat the quarter's EPS and revenue estimates (EPS -$0.01 vs. -$0.12; revenue $134.27M, +33.9% YoY) but remains unprofitable with a negative net margin and Q1 guidance of -$0.090 to $0.000; analysts' consensus rating is "Hold" with an average target of $52.80.
• Insider selling notable: Insiders sold 326,333 shares (~$29.8M) in the past three months, lowering insider ownership to 4.5%, while institutional investors hold about 61.7% of the stock.

Applied Optoelectronics, Inc. (NASDAQ:AAOI - Get Free Report) was the recipient of some unusual options trading activity on Thursday. Stock traders purchased 35,172 call options on the company. This represents an increase of approximately 33% compared to the typical daily volume of 26,420 call options.

Applied Optoelectronics Stock Up 3.7%

Shares of Applied Optoelectronics stock traded up $5.28 on Thursday, reaching $147.83. The stock had a trading volume of 5,646,627 shares, compared to its average volume of 9,295,438. The company has a 50 day moving average price of $88.75 and a 200 day moving average price of $51.86. The company has a quick ratio of 1.91, a current ratio of 2.63 and a debt-to-equity ratio of 0.18. Applied Optoelectronics has a 1 year low of $9.71 and a 1 year high of $155.40. The stock has a market capitalization of $11.12 billion, a P/E ratio of -227.69 and a beta of 3.23.

Applied Optoelectronics (NASDAQ:AAOI - Get Free Report) last released its earnings results on Thursday, February 26th. The semiconductor company reported ($0.01) earnings per share for the quarter, topping the consensus estimate of ($0.12) by $0.11. The company had revenue of $134.27 million for the quarter, compared to the consensus estimate of $131.56 million. Applied Optoelectronics had a negative net margin of 8.39% and a negative return on equity of 5.29%. Applied Optoelectronics's revenue was up 33.9% compared to the same quarter last year. During the same quarter in the previous year, the firm earned ($0.02) EPS. Applied Optoelectronics has set its Q1 2026 guidance at -0.090-0.000 EPS. As a group, equities research analysts forecast that Applied Optoelectronics will post -1.18 EPS for the current year.

Wall Street Analysts Forecast Growth

A number of equities analysts have commented on the stock. Wall Street Zen lowered shares of Applied Optoelectronics from a "hold" rating to a "sell" rating in a report on Monday. Needham & Company LLC raised their target price on shares of Applied Optoelectronics from $43.00 to $80.00 and gave the stock a "buy" rating in a report on Friday, February 27th. Rosenblatt Securities restated a "buy" rating and issued a $50.00 target price on shares of Applied Optoelectronics in a report on Thursday, February 19th. Northland Securities restated a "market perform" rating and issued a $55.00 target price on shares of Applied Optoelectronics in a report on Friday, February 27th. Finally, B. Riley Financial upgraded shares of Applied Optoelectronics from a "sell" rating to a "neutral" rating and set a $54.00 target price for the company in a report on Friday, February 27th. Three investment analysts have rated the stock with a Buy rating, three have given a Hold rating and one has issued a Sell rating to the stock. According to data from MarketBeat.com, the stock currently has an average rating of "Hold" and an average target price of $52.80.

Insider Transactions at Applied Optoelectronics

In related news, Director Cynthia Delaney sold 21,000 shares of the business's stock in a transaction dated Wednesday, March 4th. The shares were sold at an average price of $98.02, for a total transaction of $2,058,420.00. Following the sale, the director owned 116,222 shares of the company's stock, valued at $11,392,080.44. The trade was a 15.30% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which is available at this link. Also, insider Hung-Lun (Fred) Chang sold 36,400 shares of the company's stock in a transaction that occurred on Monday, March 16th. The stock was 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 in the company, valued at approximately $23,420,204.50. This represents a 13.48% decrease in their position. The disclosure for this sale is available in the SEC filing. In the last three months, insiders have sold 326,333 shares of company stock valued at $29,802,706. Company insiders own 4.50% of the company's stock.

Hedge Funds Weigh In On Applied Optoelectronics

Several large investors have recently made changes to their positions in the company. Allworth Financial LP grew its holdings in shares of Applied Optoelectronics by 1,923.7% in the fourth quarter. Allworth Financial LP now owns 769 shares of the semiconductor company's stock valued at $27,000 after purchasing an additional 731 shares during the period. Comerica Bank purchased a new stake in shares of Applied Optoelectronics in the third quarter valued at about $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 valued at $42,000 after purchasing an additional 750 shares during the period. Kohmann Bosshard Financial Services LLC purchased a new stake in shares of Applied Optoelectronics in the fourth quarter valued at about $55,000. Finally, Headlands Technologies LLC purchased a new stake in shares of Applied Optoelectronics in the second quarter valued at about $57,000. 61.70% of the stock is currently owned by institutional investors and hedge funds.

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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