Analyzing Applied Optoelectronics (NASDAQ:AAOI) and GSI Technology (NASDAQ:GSIT)

Applied Optoelectronics (NASDAQ:AAOIGet Rating) and GSI Technology (NASDAQ:GSITGet Rating) are both small-cap computer and technology companies, but which is the better business? We will contrast the two companies based on the strength of their dividends, valuation, institutional ownership, earnings, profitability, risk and analyst recommendations.

Volatility & Risk

Applied Optoelectronics has a beta of 1.35, suggesting that its stock price is 35% more volatile than the S&P 500. Comparatively, GSI Technology has a beta of 0.94, suggesting that its stock price is 6% less volatile than the S&P 500.


This table compares Applied Optoelectronics and GSI Technology’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Applied Optoelectronics -29.80% -18.93% -8.95%
GSI Technology -53.82% -27.43% -23.40%

Institutional and Insider Ownership

33.3% of Applied Optoelectronics shares are held by institutional investors. Comparatively, 21.9% of GSI Technology shares are held by institutional investors. 4.5% of Applied Optoelectronics shares are held by company insiders. Comparatively, 32.1% of GSI Technology shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares Applied Optoelectronics and GSI Technology’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Applied Optoelectronics $222.82 million 0.23 -$66.40 million ($2.35) -0.74
GSI Technology $29.69 million 4.71 -$15.98 million ($0.65) -8.72

GSI Technology has lower revenue, but higher earnings than Applied Optoelectronics. GSI Technology is trading at a lower price-to-earnings ratio than Applied Optoelectronics, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of current ratings for Applied Optoelectronics and GSI Technology, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Applied Optoelectronics 0 0 1 0 3.00
GSI Technology 0 0 0 0 N/A

Applied Optoelectronics presently has a consensus price target of $4.77, suggesting a potential upside of 172.38%. Given Applied Optoelectronics’ higher possible upside, equities research analysts clearly believe Applied Optoelectronics is more favorable than GSI Technology.


Applied Optoelectronics beats GSI Technology on 9 of the 13 factors compared between the two stocks.

About Applied Optoelectronics

(Get Rating)

Applied Optoelectronics, Inc. engages in the design and manufacture of optical communications products. Its products include optical devices, such as laser diodes, photodiodes, related modules and circuitry, and equipment for applications in fiber-to-the-home, cable television, point to point communications and wireless. The company was founded by Chih Hsiang Lin on February 28, 1997 and is headquartered in Sugar Land, TX.

About GSI Technology

(Get Rating)

GSI Technology, Inc. engages in the design, development and marketing of memory products primarily for the networking, and telecommunications markets. Its product includes Static Random Access Memory, or SRAM, which incorporated in networking and telecommunications equipment, such as routers, switches, wide area network infrastructure equipment, wireless base stations and network access equipment. It also offers services to the ongoing needs of the military, industrial, test and measurement equipment, automotive and medical markets for SRAMs .The company was founded by Lee-Lean Shu and Robert Yau in March 1995 and is headquartered in Sunnyvale, CA.

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