Applied Optoelectronics (NASDAQ:AAOI) Raised to “Hold” at Wall Street Zen

Applied Optoelectronics (NASDAQ:AAOI) was upgraded by analysts at Wall Street Zen from a “sell” rating to a “hold” rating in a research note issued on Saturday.

Other analysts have also recently issued research reports about the company. Raymond James Financial set a $151.00 price objective on Applied Optoelectronics in a report on Friday. B. Riley Financial reissued a “neutral” rating on shares of Applied Optoelectronics in a report on Friday. Weiss Ratings restated a “sell (d-)” rating on shares of Applied Optoelectronics in a research report on Tuesday, July 7th. Rosenblatt Securities reaffirmed a “buy” rating and set a $220.00 price objective on shares of Applied Optoelectronics in a research note on Friday. Finally, Needham & Company LLC decreased their target price on shares of Applied Optoelectronics from $220.00 to $190.00 and set a “buy” rating on the stock in a report on Friday. Three investment analysts have rated the stock with a Buy rating, two have assigned a Hold rating and one has given a Sell rating to the stock. According to MarketBeat, the stock presently has a consensus rating of “Hold” and a consensus target price of $134.00.

Applied Optoelectronics Price Performance

AAOI opened at $135.63 on Friday. The company has a 50 day moving average of $137.34 and a 200 day moving average of $118.71. The company has a market cap of $10.88 billion, a PE ratio of -173.88 and a beta of 3.76. Applied Optoelectronics has a 12 month low of $18.50 and a 12 month high of $233.67. The company has a current ratio of 2.78, a quick ratio of 2.13 and a debt-to-equity ratio of 0.12.

Applied Optoelectronics (NASDAQ:AAOI) last issued its earnings results on Thursday, August 6th. The semiconductor company reported $0.06 earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of $0.02 by $0.04. The business had revenue of $191.92 million for the quarter, compared to analysts’ expectations of $190.48 million. Applied Optoelectronics had a negative net margin of 9.57% and a negative return on equity of 1.98%. The business’s revenue for the quarter was up 86.3% compared to the same quarter last year. During the same quarter in the previous year, the firm posted ($0.16) EPS. Applied Optoelectronics has set its Q3 2026 guidance at 0.110-0.260 EPS. On average, sell-side analysts expect that Applied Optoelectronics will post 0.6 EPS for the current year.

Insiders Place Their Bets

In other Applied Optoelectronics news, insider Hung-Lun (Fred) Chang sold 40,329 shares of the business’s stock in a transaction that occurred on Wednesday, June 17th. The shares were 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 owned 286,124 shares of the company’s stock, valued at $48,812,754.40. The trade was a 12.35% decrease in their position. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available at this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CEO Chih-Hsiang (Thompson) Lin sold 59,000 shares of the stock in a transaction on Friday, June 12th. The stock was sold at an average price of $166.53, for a total transaction of $9,825,270.00. Following the completion of the transaction, the chief executive officer directly owned 1,302,436 shares in the company, valued at $216,894,667.08. The trade was a 4.33% decrease in their position. 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. Insiders sold a total of 506,215 shares of company stock valued at $87,409,447 over the last three months. Corporate insiders own 3.80% of the company’s stock.

Institutional Inflows and Outflows

A number of institutional investors have recently added to or reduced their stakes in AAOI. Wealthfront Advisers LLC purchased a new stake in Applied Optoelectronics during the second quarter valued at about $1,003,000. Timothy G. Youngquist 2020 Irrevocable Trust lifted its stake in Applied Optoelectronics by 16.5% during the second quarter. Timothy G. Youngquist 2020 Irrevocable Trust now owns 55,796 shares of the semiconductor company’s stock worth $8,267,000 after purchasing an additional 7,909 shares during the last quarter. Citizens Financial Group Inc. RI purchased a new position in shares of Applied Optoelectronics in the 2nd quarter worth about $1,675,000. BlackRock Inc. purchased a new position in shares of Applied Optoelectronics in the 2nd quarter worth about $955,672,000. Finally, Deutsche Bank AG bought a new position in shares of Applied Optoelectronics during the 2nd quarter valued at about $7,516,000. Institutional investors own 61.70% of the company’s stock.

Applied Optoelectronics News Roundup

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

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.