Applied Optoelectronics (NASDAQ:AAOI) Announces Quarterly Earnings Results

Applied Optoelectronics (NASDAQ:AAOI) issued its quarterly earnings results on Thursday. The semiconductor company reported $0.06 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $0.02 by $0.04, FiscalAI reports. The company had revenue of $191.92 million for the quarter, compared to analyst estimates of $190.48 million. Applied Optoelectronics had a negative net margin of 8.55% and a negative return on equity of 4.64%. The business’s revenue for the quarter was up 86.3% compared to the same quarter last year. During the same period in the prior year, the firm earned ($0.16) earnings per share. Applied Optoelectronics updated its Q3 2026 guidance to 0.110-0.260 EPS.

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

• Record revenue and return to profitability: Q2 revenue reached $191.9 million, up 86% year over year, marking the fifth consecutive quarterly revenue record. Non-GAAP net income was $5.5 million, or $0.06 per diluted share, ahead of guidance.
• AI-related demand remains exceptionally strong: 800G revenue more than doubled sequentially to $12.8 million, while 400G revenue rose 27.4% sequentially to $48.4 million. Management said forecast demand for 800G and 1.6T products exceeds production capacity through mid-2027.
• Major capacity expansion and product ramps are underway: AOI expects 800G and 1.6T production capacity to rise from nearly 200,000 units per month currently to more than 650,000 by year-end 2026 and over 930,000 by year-end 2027. Initial 1.6T shipments are expected later this quarter, with a larger ramp in 2027.
• CATV business delivered broad-based growth: Record CATV revenue of $80.6 million increased 43.8% year over year, and management guided to $100 million-$110 million in Q3 revenue. Mediacom also selected AOI as its primary vendor for DOCSIS 4.0 upgrades.
• Execution and funding risks remain significant: Q3 100G revenue is expected to decline by $20 million-$25 million because of a customer’s switch and memory shortages, while DSP/TIA and other material constraints could limit the 1.6T ramp. AOI also reported $565.5 million of Q2 capital investments, expects higher second-half CapEx, and plans to use additional equity and debt financing.

Applied Optoelectronics Stock Up 9.2%

NASDAQ:AAOI traded up $11.41 during trading hours on Friday, hitting $135.63. The company’s stock had a trading volume of 24,044,824 shares, compared to its average volume of 10,638,461. Applied Optoelectronics has a 52-week low of $18.50 and a 52-week high of $233.67. The company has a current ratio of 3.83, a quick ratio of 3.03 and a debt-to-equity ratio of 0.18. The stock has a market capitalization of $10.88 billion, a P/E ratio of -205.50 and a beta of 3.76. The stock has a fifty day moving average of $137.79 and a 200-day moving average of $118.02.

Applied Optoelectronics News Summary

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

• Positive Sentiment: Q2 results exceeded expectations: Applied Optoelectronics reported adjusted EPS of $0.06 versus consensus estimates near $0.02–$0.03. Revenue reached approximately $191.9 million, ahead of estimates and up about 86% year over year from $103 million. Applied Optoelectronics Q2 Earnings Beat Estimates, Revenues Up Y/Y
• Positive Sentiment: AI datacenter demand is accelerating: Growth was driven by datacenter products, including rapidly expanding 800G optical transceivers. Management is also increasing capacity for 800G and 1.6T products, with demand reportedly exceeding available supply through at least mid-2027. AAOI Q2 Earnings Call Focuses on Capacity-Led 800G Ramp
• Positive Sentiment: Analyst support and industry momentum helped sentiment: Rosenblatt Securities reaffirmed its “buy” rating and assigned a $220 price target. Photonics and optics companies also benefited from strong sector earnings and expectations that potential U.S. restrictions on Chinese optical-transceiver imports could reduce overseas competition. Benzinga analyst rating report
• Neutral Sentiment: Expansion is being limited by supply: Management said it could sell more products if it had greater manufacturing capacity. Component shortages are expected to constrain near-term growth, even as they demonstrate strong underlying demand. Applied Optoelectronics says it could sell more if it could make more
• Negative Sentiment: Q3 profit guidance disappointed: The company forecast EPS of $0.11–$0.26, below the roughly $0.27 analyst consensus, although projected revenue of $255 million–$290 million brackets consensus near $265.7 million. Analysts also flagged competition, a setback in 100G products and valuation concerns after the stock’s substantial rally. Applied Optoelectronics slides amid mixed Q2 results and guidance

Analyst Upgrades and Downgrades

Several equities research analysts recently weighed in on AAOI shares. Weiss Ratings reaffirmed a “sell (d-)” rating on shares of Applied Optoelectronics in a research note on Tuesday, July 7th. Needham & Company LLC cut their price objective on Applied Optoelectronics from $220.00 to $190.00 and set a “buy” rating on the stock in a research report on Friday. B. Riley Financial reissued a “neutral” rating on shares of Applied Optoelectronics in a research note on Friday. Wall Street Zen downgraded Applied Optoelectronics from a “hold” rating to a “sell” rating in a report on Monday, April 13th. Finally, Rosenblatt Securities restated a “buy” rating and set a $220.00 price target on shares of Applied Optoelectronics in a report on Friday. Three equities research analysts have rated the stock with a Buy rating, two have given a Hold rating and one has issued a Sell rating to the company. According to data from MarketBeat, the stock has a consensus rating of “Hold” and an average target price of $134.00.

Insider Buying and Selling at Applied Optoelectronics

In related news, insider Hung-Lun (Fred) Chang sold 40,329 shares of the company’s stock in a transaction that occurred on Wednesday, June 17th. The stock was sold at an average price of $170.60, for a total value of $6,880,127.40. Following the completion of the transaction, the insider directly 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 sale was disclosed in a document filed with the SEC, which is available through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Shu-Hua (Joshua) Yeh sold 39,154 shares of the stock in a transaction that occurred on Tuesday, May 19th. The shares were sold at an average price of $173.26, for a total transaction of $6,783,822.04. Following the completion of the transaction, the insider owned 462,430 shares in the company, valued at $80,120,621.80. This represents a 7.81% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The sale was made to cover tax withholding obligations related to the vesting of equity awards. In the last quarter, insiders sold 506,215 shares of company stock worth $87,409,447. Corporate insiders own 3.80% of the company’s stock.

Institutional Inflows and Outflows

Several large investors have recently modified their holdings of AAOI. Persistent Asset Partners Ltd purchased a new position in Applied Optoelectronics during the 4th quarter worth approximately $237,000. State Board of Administration of Florida Retirement System purchased a new stake in Applied Optoelectronics in the fourth quarter valued at approximately $238,000. Larson Financial Group LLC lifted its stake in Applied Optoelectronics by 14,222.0% in the third quarter. Larson Financial Group LLC now owns 7,161 shares of the semiconductor company’s stock valued at $186,000 after buying an additional 7,111 shares during the last quarter. Creative Planning acquired a new stake in shares of Applied Optoelectronics in the third quarter valued at approximately $218,000. Finally, Zurcher Kantonalbank Zurich Cantonalbank boosted its holdings in shares of Applied Optoelectronics by 43.4% in the third quarter. Zurcher Kantonalbank Zurich Cantonalbank now owns 9,128 shares of the semiconductor company’s stock valued at $237,000 after acquiring an additional 2,762 shares during the period. Institutional investors and hedge funds own 61.70% of the company’s stock.

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.