Applied Optoelectronics (NASDAQ:AAOI) Shares Down 10.6% Following Weak Earnings

Applied Optoelectronics, Inc. (NASDAQ:AAOI) shares traded down 10.6% during trading on Thursday following a dissappointing earnings announcement. The stock traded as low as $160.11 and last traded at $159.6530. 4,806,944 shares changed hands during mid-day trading, a decline of 49% from the average session volume of 9,338,883 shares. The stock had previously closed at $178.54.

The semiconductor company reported ($0.07) EPS for the quarter, missing the consensus estimate of ($0.05) by ($0.02). Applied Optoelectronics had a negative net margin of 8.39% and a negative return on equity of 5.29%. The company had revenue of $151.14 million during the quarter, compared to the consensus estimate of $156.98 million. Applied Optoelectronics has set its Q2 2026 guidance at -0.030-0.030 EPS.

Trending Headlines about Applied Optoelectronics

Here are the key news stories impacting Applied Optoelectronics this week:

• Positive Sentiment: Q1 revenue rose sharply year-over-year (about +51%) and management said it has won major hyperscale customer orders — evidence of demand exposure to AI/data-center spending. Article Title
• Positive Sentiment: Balance-sheet metrics remain healthy (low debt-to-equity and solid current/quick ratios), which gives the company flexibility while it executes on larger customer orders. Press Release
• Neutral Sentiment: Company filed its official Q1 2026 results/press release detailing results and guidance (formal source for numbers). Press Release
• Neutral Sentiment: Brokerage consensus remains non-committal (average rating: Hold), so there’s no immediate analyst-driven buy-side support. Article Title
• Negative Sentiment: Earnings missed expectations: AAOI reported ($0.07) EPS vs. consensus ($0.05) loss and revenue of $151.1M vs. $157M expected, highlighting margin pressure despite revenue growth. Press Release
• Negative Sentiment: Q2 guidance disappointed: EPS guide of -$0.03 to $0.03 vs. consensus +$0.07 and revenue guide $180–198M vs. ~$194M consensus — the main driver cited for the sharp share decline. (Guidance disclosed with Q1 release.) Article Title
• Negative Sentiment: Market sentiment and sector rotation: optics names pulled back as the AI/optics trade cooled, prompting heavy volume selling in AAOI and peers. External competitive moves (e.g., Corning scaling photonics capacity backed by big hyperscale deals) add longer-term competitive pressure. Article Title Corning Article

Analyst Upgrades and Downgrades

Several brokerages have issued reports on AAOI. 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 research report on Friday, February 27th. Needham & Company LLC increased their price objective on shares of Applied Optoelectronics from $43.00 to $80.00 and gave the stock a “buy” rating in a research report on Friday, February 27th. Northland Securities reiterated a “market perform” rating and set a $55.00 price objective on shares of Applied Optoelectronics in a research report on Friday, February 27th. Wall Street Zen cut shares of Applied Optoelectronics from a “hold” rating to a “sell” rating in a research report on Monday, April 13th. Finally, Rosenblatt Securities reiterated a “buy” rating and set a $50.00 price objective on shares of Applied Optoelectronics in a research report on Thursday, February 19th. Three equities research analysts have rated the stock with a Buy rating, three have issued a Hold rating and one has assigned a Sell rating to the stock. According to data from MarketBeat, the company presently has an average rating of “Hold” and a consensus target price of $52.80.

Insiders Place Their Bets

In other Applied Optoelectronics news, insider David C. Kuo sold 29,000 shares of the firm’s stock in a transaction on Thursday, March 19th. The shares were sold at an average price of $100.13, for a total value of $2,903,770.00. Following the completion of the sale, the insider directly owned 82,663 shares in the company, valued at approximately $8,277,046.19. This trade represents a 25.97% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which can be accessed through this hyperlink. Also, Director William H. Yeh sold 15,000 shares of the firm’s stock in a transaction on Monday, March 9th. The stock was sold at an average price of $105.76, for a total transaction of $1,586,400.00. Following the completion of the sale, the director owned 238,819 shares of the company’s stock, valued at $25,257,497.44. The trade was a 5.91% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. In the last three months, insiders sold 314,333 shares of company stock valued at $29,262,106. 3.80% of the stock is currently owned by corporate insiders.

Institutional Investors Weigh In On Applied Optoelectronics

A number of large investors have recently bought and sold shares of the stock. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. grew its holdings 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 valued at $393,000 after buying an additional 2,415 shares during the last quarter. Cetera Investment Advisers acquired a new position in shares of Applied Optoelectronics during the second quarter valued at about $377,000. New York State Common Retirement Fund grew its holdings in shares of Applied Optoelectronics by 36.0% during the second quarter. New York State Common Retirement Fund now owns 17,000 shares of the semiconductor company’s stock valued at $437,000 after buying an additional 4,500 shares during the last quarter. Invesco Ltd. grew its holdings in shares of Applied Optoelectronics by 50.0% during the second quarter. Invesco Ltd. now owns 60,817 shares of the semiconductor company’s stock valued at $1,562,000 after buying an additional 20,261 shares during the last quarter. Finally, First Trust Advisors LP bought a new position in shares of Applied Optoelectronics during the second quarter valued at about $952,000. 61.70% of the stock is currently owned by institutional investors and hedge funds.

Applied Optoelectronics Price Performance

The company has a quick ratio of 1.91, a current ratio of 2.63 and a debt-to-equity ratio of 0.18. The business’s 50-day moving average is $117.54 and its two-hundred day moving average is $63.67. The company has a market capitalization of $12.61 billion, a P/E ratio of -242.38 and a beta of 3.76.

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.