Applied Optoelectronics (NASDAQ:AAOI) Stock Price Down 5.7% - What's Next?

Key Points

• AAOI shares fell 5.7% to about $97.27, with trading volume well below average. The stock remains significantly below its 50-day and 200-day moving averages.
• Analysts have a mixed outlook: three rate the stock Buy, two Hold and one Sell, producing a consensus Hold rating and a $139.40 target price.
• The company reported stronger-than-expected quarterly results, including $0.06 EPS and $191.92 million in revenue, up 86.3% year over year. However, it still posted a negative net margin, while insiders sold $42.2 million of shares during the quarter.

Applied Optoelectronics, Inc. (NASDAQ:AAOI - Get Free Report)'s share price traded down 5.7% during trading on Thursday . The company traded as low as $98.20 and last traded at $97.2680. 1,301,492 shares were traded during trading, a decline of 88% from the average session volume of 10,521,026 shares. The stock had previously closed at $103.13.

Wall Street Analysts Forecast Growth

A number of research analysts have issued reports on AAOI shares. Rosenblatt Securities restated a "buy" rating and issued a $220.00 target price on shares of Applied Optoelectronics in a report on Friday, August 7th. Needham & Company LLC cut their price objective on shares of Applied Optoelectronics from $220.00 to $190.00 and set a "buy" rating for the company in a research report on Friday, August 7th. Weiss Ratings downgraded shares of Applied Optoelectronics from a "sell (d-)" rating to a "sell (e+)" rating in a research note on Monday, August 17th. B. Riley Financial restated a "neutral" rating on shares of Applied Optoelectronics in a research report on Friday, August 7th. Finally, Wall Street Zen raised shares of Applied Optoelectronics from a "sell" rating to a "hold" rating in a research note on Saturday, August 8th. Three research analysts have rated the stock with a Buy rating, two have issued a Hold rating and one has given a Sell rating to the company. According to MarketBeat, Applied Optoelectronics presently has an average rating of "Hold" and a consensus target price of $139.40.

Applied Optoelectronics Stock Down 1.1%

The stock has a fifty day moving average of $118.71 and a two-hundred day moving average of $129.01. The company has a quick ratio of 2.13, a current ratio of 2.78 and a debt-to-equity ratio of 0.12. The stock has a market cap of $8.62 billion, a price-to-earnings ratio of -130.82 and a beta of 3.79.

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

Insider Activity

In other news, insider Hung-Lun (Fred) Chang sold 40,329 shares of the stock in a transaction on Wednesday, June 17th. The shares were sold at an average price of $170.60, for a total value of $6,880,127.40. Following the completion of the sale, the insider owned 286,124 shares of the company's stock, valued at $48,812,754.40. This represents a 12.35% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available at this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider David C. Kuo sold 29,227 shares of the firm's stock in a transaction on Friday, June 12th. The shares were sold at an average price of $166.53, for a total transaction of $4,867,172.31. Following the completion of the transaction, the insider directly owned 149,078 shares in the company, valued at approximately $24,825,959.34. This represents a 16.39% decrease in their position. The SEC filing for this sale provides additional information. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Insiders sold a total of 254,382 shares of company stock valued at $42,173,307 over the last quarter. 3.80% of the stock is owned by insiders.

Institutional Inflows and Outflows

Several hedge funds have recently added to or reduced their stakes in AAOI. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. lifted its stake in shares of Applied Optoelectronics by 10.4% during the first quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. now owns 25,579 shares of the semiconductor company's stock worth $393,000 after purchasing an additional 2,415 shares in the last quarter. Cetera Investment Advisers purchased a new stake in shares of Applied Optoelectronics during the 2nd quarter valued at about $377,000. New York State Common Retirement Fund lifted its position 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 in the last quarter. Invesco Ltd. lifted its position 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 in the last quarter. Finally, First Trust Advisors LP purchased a new position in Applied Optoelectronics in the 2nd quarter worth approximately $952,000. 61.70% of the stock is owned by hedge funds and other institutional investors.

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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