Applied Optoelectronics (NASDAQ:AAOI) Stock Price Down 7.5% – Here’s Why

Applied Optoelectronics, Inc. (NASDAQ:AAOI) shares fell 7.5% on Thursday . The stock traded as low as $208.71 and last traded at $206.3010. 2,020,838 shares were traded during trading, a decline of 79% from the average session volume of 9,736,743 shares. The stock had previously closed at $223.10.

Applied Optoelectronics News Summary

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

• Positive Sentiment: Applied Optoelectronics is being highlighted as a major beneficiary of the AI connectivity boom, with multiple articles pointing to strong momentum in optical components and networking demand. AAOI stock’s six-fold surge so far this year makes it the standout performer of ‘AI connectivity’ play
• Positive Sentiment: The company also announced a partnership with Mediacom to support DOCSIS 4.0 network upgrades, which could expand its addressable market and improve revenue visibility. Is Applied Optoelectronics’ Partnership With Mediacom a Game-Changer?
• Positive Sentiment: Recent coverage says AAOI hit an all-time high after landing new deals and accelerating its 800G hyperscale ramp, reinforcing the bullish AI infrastructure narrative. Applied Optoelectronics (AAOI) Hits All-Time High on Newly Bagged Deals
• Neutral Sentiment: Investors are also comparing AAOI with peers like Lumentum and Coherent, with the stock’s sharp run-up making valuation a bigger focus as the sector rallies. Applied Optoelectronics Over Lumentum: One AI Networking Boom, Two Different Valuations
• Negative Sentiment: Jim Cramer’s comments were cautious, saying he does not recommend buying AAOI “up here,” which may temper enthusiasm after the stock’s big move. Jim Cramer on Applied Optoelectronics: “I Don’t Recommend Buying These Stocks Up Here”
• Negative Sentiment: Some post-earnings comparisons note that AAOI’s latest results showed margin pressure and a loss, reminding investors that profitability remains a risk despite strong revenue growth. FN vs. AAOI: Which Stock Is Worth Buying Post Latest Earnings Results?

Wall Street Analysts Forecast Growth

Several research firms have issued reports on AAOI. Rosenblatt Securities reiterated a “buy” rating and set a $50.00 price objective on shares of Applied Optoelectronics in a research note on Thursday, February 19th. Needham & Company LLC increased their target price on Applied Optoelectronics from $43.00 to $80.00 and gave the stock a “buy” rating in a report on Friday, February 27th. Northland Securities reiterated a “market perform” rating and issued a $55.00 price target on shares of Applied Optoelectronics in a report on Friday, February 27th. Weiss Ratings reiterated a “sell (d-)” rating on shares of Applied Optoelectronics in a report on Wednesday, January 21st. Finally, Raymond James Financial reiterated an “outperform” rating and issued a $160.00 price target on shares of Applied Optoelectronics in a report on Friday, May 8th. Three research analysts have rated the stock with a Buy rating, three have given a Hold rating and one has given a Sell rating to the company’s stock. According to MarketBeat.com, the stock currently has an average rating of “Hold” and a consensus price target of $79.80.

Applied Optoelectronics Stock Performance

The company has a quick ratio of 3.03, a current ratio of 3.83 and a debt-to-equity ratio of 0.18. The stock has a market cap of $16.50 billion, a P/E ratio of -311.82 and a beta of 3.76. The stock has a fifty day simple moving average of $128.50 and a 200-day simple moving average of $68.89.

Applied Optoelectronics (NASDAQ:AAOI) last issued its earnings results on Thursday, May 7th. The semiconductor company reported ($0.07) earnings per share (EPS) for the quarter, missing analysts’ consensus estimates of ($0.05) by ($0.02). The company had revenue of $151.14 million for the quarter, compared to the consensus estimate of $156.98 million. Applied Optoelectronics had a negative return on equity of 4.64% and a negative net margin of 8.55%.Applied Optoelectronics’s quarterly revenue was up 51.3% on a year-over-year basis. During the same quarter last year, the business posted ($0.02) EPS. Applied Optoelectronics has set its Q2 2026 guidance at -0.030-0.030 EPS. Equities analysts expect that Applied Optoelectronics, Inc. will post 0.66 earnings per share for the current fiscal year.

Insider Activity at Applied Optoelectronics

In related news, insider Shu-Hua (Joshua) Yeh sold 50,000 shares of Applied Optoelectronics stock in a transaction that occurred on Monday, March 9th. The stock was sold at an average price of $97.10, for a total value of $4,855,000.00. Following the sale, the insider owned 322,051 shares of the company’s stock, valued at approximately $31,271,152.10. This trade represents a 13.44% decrease in their position. The sale was disclosed in a filing with the Securities & Exchange Commission, which can be accessed through this hyperlink. Also, Director William H. Yeh sold 15,000 shares of Applied Optoelectronics stock in a transaction that occurred on Monday, March 9th. The shares were sold at an average price of $105.76, for a total value of $1,586,400.00. Following the completion of the sale, the director directly owned 238,819 shares in the company, valued at approximately $25,257,497.44. This represents a 5.91% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. Insiders have sold a total of 276,313 shares of company stock valued at $27,360,465 over the last 90 days. Insiders own 3.80% of the company’s stock.

Institutional Inflows and Outflows

Hedge funds have recently bought and sold shares of the stock. Allworth Financial LP grew its stake in 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 in the last quarter. Comerica Bank bought a new position in Applied Optoelectronics in the third quarter valued at approximately $28,000. Northwestern Mutual Wealth Management Co. grew its stake in 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 in the last quarter. Kohmann Bosshard Financial Services LLC bought a new position in Applied Optoelectronics in the fourth quarter valued at approximately $55,000. Finally, Headlands Technologies LLC bought a new position in shares of Applied Optoelectronics during the 2nd quarter worth approximately $57,000. 61.70% of the stock is currently owned by institutional investors.

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.