Applied Optoelectronics (NASDAQ:AAOI) Stock Jumps 6.2% - Should You Buy?

Key Points

• AAOI shares rose 6.2% to about $129.15, although trading volume was 44% below the average session volume.
• The company exceeded quarterly expectations, reporting $0.06 EPS versus $0.02 expected and $191.92 million in revenue, up 86.3% year over year. It guided for third-quarter EPS of $0.11–$0.26.
• Analyst sentiment remains mixed: the consensus rating is “Hold” with a $139.40 price target, while insiders have sold 52,172 shares worth approximately $6.1 million over the past 90 days.

Applied Optoelectronics, Inc. (NASDAQ:AAOI - Get Free Report)'s share price was up 6.2% during mid-day trading on Tuesday. The company traded as high as $130.42 and last traded at $129.1450. Approximately 5,670,762 shares were traded during mid-day trading, a decline of 44% from the average session volume of 10,200,799 shares. The stock had previously closed at $121.57.

Wall Street Analysts Forecast Growth

A number of equities analysts recently commented on the stock. B. Riley Financial reiterated a "neutral" rating on shares of Applied Optoelectronics in a research report on Friday, August 7th. Needham & Company LLC reduced their price objective on Applied Optoelectronics from $220.00 to $190.00 and set a "buy" rating on the stock in a research note on Friday, August 7th. Rosenblatt Securities reiterated a "buy" rating and issued a $220.00 price objective on shares of Applied Optoelectronics in a report on Friday, August 7th. Wall Street Zen raised Applied Optoelectronics from a "sell" rating to a "hold" rating in a research note on Saturday, August 8th. Finally, Raymond James Financial restated an "outperform" rating and set a $178.00 target price on shares of Applied Optoelectronics in a report on Tuesday, August 11th. Three equities research analysts have rated the stock with a Buy rating, two have issued a Hold rating and one has issued a Sell rating to the company's stock. According to data from MarketBeat, Applied Optoelectronics has an average rating of "Hold" and a consensus target price of $139.40.

Applied Optoelectronics Stock Performance

The business's fifty day simple moving average is $111.73 and its 200-day simple moving average is $133.06. The firm has a market cap of $10.93 billion, a P/E ratio of -165.38 and a beta of 3.85. The company has a current ratio of 2.78, a quick ratio of 2.13 and a debt-to-equity ratio of 0.12.

Applied Optoelectronics (NASDAQ:AAOI - Get Free Report) last posted its earnings results on Thursday, August 6th. The semiconductor company reported $0.06 earnings per share for the quarter, topping analysts' consensus estimates of $0.02 by $0.04. The company had revenue of $191.92 million during the quarter, compared to analyst estimates of $190.48 million. Applied Optoelectronics had a negative net margin of 9.57% and a negative return on equity of 1.98%. Applied Optoelectronics's revenue for the quarter was up 86.3% on a year-over-year basis. During the same period in the prior year, the business posted ($0.16) earnings per share. Applied Optoelectronics has set its Q3 2026 guidance at 0.110-0.260 EPS. As a group, sell-side analysts expect that Applied Optoelectronics, Inc. will post 0.55 earnings per share for the current year.

Insiders Place Their Bets

In related news, insider Hung-Lun Chang sold 32,172 shares of the company's stock in a transaction that occurred on Tuesday, September 8th. The stock was sold at an average price of $110.21, for a total transaction of $3,545,676.12. Following the completion of the transaction, the insider owned 249,276 shares in the company, valued at $27,472,707.96. This represents a 11.43% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available through this hyperlink. Also, CFO Stefan J. Murry sold 4,000 shares of the firm's stock in a transaction on Thursday, September 10th. The stock was sold at an average price of $105.33, for a total value of $421,320.00. Following the completion of the sale, the chief financial officer directly owned 367,168 shares of the company's stock, valued at $38,673,805.44. The trade was a 1.08% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last 90 days, insiders sold 52,172 shares of company stock worth $6,092,409. 3.80% of the stock is currently owned by company insiders.

Institutional Inflows and Outflows

Several institutional investors have recently added to or reduced their stakes in AAOI. BlackRock Inc. bought a new stake in shares of Applied Optoelectronics during the 2nd quarter valued at about $955,672,000. William Blair Investment Management LLC bought a new position in Applied Optoelectronics in the second quarter worth about $74,703,000. Renaissance Technologies LLC purchased a new stake in Applied Optoelectronics in the first quarter worth about $47,817,000. Bank of America Corp DE purchased a new stake in Applied Optoelectronics in the second quarter worth about $33,712,000. Finally, Bank of New York Mellon Corp bought a new stake in Applied Optoelectronics during the 2nd quarter valued at approximately $32,567,000. 61.70% of the stock is currently owned by institutional investors.

Applied Optoelectronics Company Profile

Applied Optoelectronics, Inc NASDAQ: AAOI develops and manufactures fiber-optic networking products used to transmit data across broadband, data center, telecommunications and wireless networks. Its portfolio includes optical transceivers, modules, lasers, components and networking equipment designed for high-speed communications infrastructure.

The company serves communications service providers, cable television and broadband operators, internet content providers, data center operators and telecommunications customers.

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