Applied Optoelectronics

AAOI

Market cap $6.81B

The optical and photonics sector is bouncing back in premarket trading Wednesday, with Coherent (Nasdaq: COHR), Lumentum (Nasdaq: LITE), and Applied Optoelectronics (Nasdaq: AAOI) all pushing higher after a rough Tuesday session.

Shares of Credo Technology (Nasdaq: CRDO), Lumentum (Nasdaq: LITE), and Applied Optoelectronics (Nasdaq: AAOI) were hammered Tuesday, with CRDO down 15%, LITE off 11%, and AAOI sliding 7% as investors rushed for the exits after a massive sector-wide surge yesterday.

Shares of the optical-networking provider have nearly tripled so far this year as AI players seek out high-bandwidth, low-latency connectivity products.

While February tested investor patience with its choppy action and internal weakness, the data entering March tells a vastly different story.

I turned bullish on Applied Optoelectronics in November when it was trading at $24, identifying the 800G inflection before consensus reset expectations. AAOI exited 2025 with 90,000 monthly 800G capacity, targeting over 500,000 units by the end of 2026. Vertical integration of indium phosphide lasers supports a path toward 35–38% gross margins by 2027.

Applied Optoelectronics Inc (NASDAQ: AAOI) shares are surging on Monday following last week's strong earnings report that exceeded expectations. Here's what investors need to know.

Every time I refresh pricing on Applied Optoelectronics (Nasdaq: AAOI) on Monday morning, the stock seems to be rising.

The Undercovered Dozen series spotlights 12 less-covered stocks highlighted in recent Seeking Alpha articles. This week's edition covers articles published between Feb. 20 and Feb. 26, offering fresh investment ideas. The series aims to inspire discussion and help investors discover overlooked opportunities in the market.

Applied Optoelectronics (AOI) delivered a Q4 beat and issued bullish CY26 guidance, projecting a 3.5x jump in data center revenues. While consensus estimates still project $856M, AOI management targets $1B in CY26 revenue, with hyperscalers expected to contribute 70%, driven by 800G and 1.6T optical modules. Gross margin expansionary path from 31% to 40% is possible as AOI ramps higher-speed modules and expands capacity via aggressive capex.

Applied Optoelectronics reported record revenue for Q4-2025, driven by high demand for its products in AI data center build-outs and the CATV markets. AOI gave positive forward guidance into 2026 and expects revenues to continue to increase. The company is increasing its manufacturing capacity to meet demand.