Applied Optoelectronics (NASDAQ:AAOI) Issues Earnings Results

Applied Optoelectronics (NASDAQ:AAOI) announced its quarterly earnings data on Thursday. The semiconductor company reported ($0.07) earnings per share (EPS) for the quarter, missing analysts’ consensus estimates of ($0.05) by ($0.02), FiscalAI reports. 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 for the quarter, compared to analysts’ expectations of $156.98 million. During the same period last year, the business earned ($0.02) earnings per share. The company’s quarterly revenue was up 51.3% compared to the same quarter last year. Applied Optoelectronics updated its Q2 2026 guidance to -0.030-0.030 EPS.

Here are the key takeaways from Applied Optoelectronics’ conference call:

• AOI reported a record quarter with $151.1M revenue (up 51% YoY), raised 2026 revenue guidance to >$1.1B, and expects >$140M in non?GAAP operating income for the year.
• Management highlighted accelerating customer demand and product wins for high?speed modules — including the first volume shipment of 800G transceivers and a first volume order for 1.6T — with a strong ramp expected starting Q2 and a larger ramp in Q3.
• AOI is aggressively expanding manufacturing (new Texas buildings plus global sites) and reported exiting Q1 ~100k 800G/1.6T units/month capacity, targeting ~150k this quarter and ~650k/month by year?end, funded by cash, operations, equity and debt.
• Margins and profitability are a focus: Q1 non?GAAP gross margin was 29.2%, company expects ~29–30% in Q2, targets ~35% by year?end and ~40% longer?term, and forecasts approaching sustained non?GAAP profitability this year.
• Key risks include supply chain and execution (indium phosphide/laser capacity is critical despite in?house production), a recent $1.4M tariff hit with a refund timing uncertainty (~$5.7M expected), and high customer concentration (top 10 = 98%, one CATV customer = 44% of revenue).

Applied Optoelectronics Trading Down 11.8%

AAOI traded down $20.99 during trading on Thursday, reaching $157.55. The company had a trading volume of 14,113,055 shares, compared to its average volume of 10,705,332. The stock has a market cap of $12.61 billion, a P/E ratio of -242.38 and a beta of 3.76. The business has a 50 day simple moving average of $119.57 and a 200-day simple moving average of $64.55. Applied Optoelectronics has a 52 week low of $12.56 and a 52 week high of $191.87. The company has a quick ratio of 1.91, a current ratio of 2.63 and a debt-to-equity ratio of 0.18.

Wall Street Analysts Forecast Growth

A number of research analysts recently weighed in on the stock. Northland Securities reissued a “market perform” rating and issued a $55.00 target price on shares of Applied Optoelectronics in a report on Friday, February 27th. Weiss Ratings reissued a “sell (d-)” rating on shares of Applied Optoelectronics in a report on Wednesday, January 21st. B. Riley Financial raised shares of Applied Optoelectronics from a “sell” rating to a “neutral” rating and set a $54.00 target price for the company in a report on Friday, February 27th. Wall Street Zen lowered shares of Applied Optoelectronics from a “hold” rating to a “sell” rating in a report on Monday, April 13th. Finally, Needham & Company LLC raised their target price on shares of Applied Optoelectronics from $43.00 to $80.00 and gave the company a “buy” rating in a report on Friday, February 27th. Three investment analysts have rated the stock with a Buy rating, three have assigned a Hold rating and one has assigned a Sell rating to the company. According to MarketBeat, Applied Optoelectronics currently has a consensus rating of “Hold” and a consensus price target of $52.80.

Key Stories Impacting Applied Optoelectronics

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

• Positive Sentiment: Company reports wins with hyperscale customers mentioned in a portfolio review, which could support longer-term revenue if those orders scale. Carillon Eagle Fund Q1 2026 Portfolio Review
• Neutral Sentiment: Company filed an official press release with full Q1 results and commentary; use this for company-provided detail on results and order commentary. GlobeNewswire: Q1 2026 Results
• Neutral Sentiment: Brokerage consensus remains around a “Hold” rating, indicating mixed analyst sentiment despite the recent volatility. Brokerage Ratings Summary
• Negative Sentiment: Q1 results missed expectations: EPS of -$0.07 (vs. consensus -$0.05) and revenue $151.14M (vs. $156.98M), with negative net margin and ROE — a clear near-term fundamental miss. Company Press Release / Q1 Report
• Negative Sentiment: Q2 guidance underwhelms: EPS guidance of -$0.03 to $0.03 and revenue $180M–$198M both come in below consensus (EPS ~ $0.07; revenue ~$194.1M), prompting investor concern over near-term demand and margin recovery.
• Negative Sentiment: Market reaction and sector tilt: the optics/AI connectivity trade cooled and AAOI shares sold off in intraday trading alongside peers, reflecting rotation and concern about whether smaller optics suppliers will capture large hyperscale spending. Optics Trade Pullback Coverage
• Negative Sentiment: Competitive pressure from large suppliers: coverage on Corning’s large-capacity, hyperscale agreements and NVIDIA-backed expansion highlights a risk that bigger, contract-backed suppliers could win long-term, high-volume deals at the expense of peers like AAOI. Corning/NVIDIA Optical Capacity Article

Insider Buying and Selling

In related news, insider Hung-Lun (Fred) Chang sold 36,400 shares of the firm’s stock in a transaction on Monday, March 16th. The stock was sold at an average price of $100.25, for a total value of $3,649,100.00. Following the completion of the sale, the insider directly owned 233,618 shares in the company, valued at $23,420,204.50. This trade represents a 13.48% decrease in their ownership of the stock. The sale was disclosed in a filing with the Securities & Exchange Commission, which is available through this hyperlink. Also, insider Shu-Hua (Joshua) Yeh sold 50,000 shares of the firm’s stock in a transaction 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 completion of the sale, the insider owned 322,051 shares of the company’s stock, valued at approximately $31,271,152.10. This represents a 13.44% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Insiders sold 314,333 shares of company stock valued at $29,262,106 over the last 90 days. 3.80% of the stock is currently owned by insiders.

Institutional Trading of Applied Optoelectronics

A number of institutional investors have recently bought and sold shares of AAOI. Invesco Ltd. lifted its position in Applied Optoelectronics by 5,208.9% in the fourth quarter. Invesco Ltd. now owns 3,512,309 shares of the semiconductor company’s stock worth $122,439,000 after buying an additional 3,446,150 shares during the last quarter. Price T Rowe Associates Inc. MD lifted its position in Applied Optoelectronics by 5,321.6% in the fourth quarter. Price T Rowe Associates Inc. MD now owns 2,229,757 shares of the semiconductor company’s stock worth $77,730,000 after buying an additional 2,188,630 shares during the last quarter. Morgan Stanley lifted its position in Applied Optoelectronics by 157.1% in the fourth quarter. Morgan Stanley now owns 1,699,855 shares of the semiconductor company’s stock worth $59,257,000 after buying an additional 1,038,775 shares during the last quarter. Hawk Ridge Capital Management LP lifted its position in shares of Applied Optoelectronics by 106.2% during the fourth quarter. Hawk Ridge Capital Management LP now owns 1,700,900 shares of the semiconductor company’s stock worth $59,293,000 after purchasing an additional 875,903 shares during the last quarter. Finally, Alyeska Investment Group L.P. bought a new stake in shares of Applied Optoelectronics during the third quarter worth $19,738,000. 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.