Applied Optoelectronics (NASDAQ:AAOI) Shares Down 7.9% – Should You Sell?

Applied Optoelectronics, Inc. (NASDAQ:AAOI)’s share price dropped 7.9% during mid-day trading on Tuesday . The stock traded as low as $177.26 and last traded at $176.4730. Approximately 3,796,050 shares changed hands during trading, a decline of 64% from the average daily volume of 10,416,618 shares. The stock had previously closed at $191.55.

Analyst Upgrades and Downgrades

AAOI has been the subject of several research reports. Raymond James Financial reiterated an “outperform” rating on shares of Applied Optoelectronics in a report on Wednesday, June 10th. Needham & Company LLC lifted their price target on Applied Optoelectronics from $43.00 to $80.00 and gave the company a “buy” rating in a report on Friday, February 27th. Wall Street Zen lowered Applied Optoelectronics from a “hold” rating to a “sell” rating in a report on Monday, April 13th. Northland Securities reiterated a “market perform” rating and set a $55.00 price target on shares of Applied Optoelectronics in a report on Friday, February 27th. Finally, B. Riley Financial raised Applied Optoelectronics from a “sell” rating to a “neutral” rating and set a $54.00 price objective on the stock in a research note on Friday, February 27th. Three investment analysts have rated the stock with a Buy rating, three have issued a Hold rating and one has assigned a Sell rating to the company’s stock. According to MarketBeat, the company currently has a consensus rating of “Hold” and an average price target of $79.80.

Applied Optoelectronics Price Performance

The stock has a 50 day moving average of $165.57 and a two-hundred day moving average of $93.67. The company has a debt-to-equity ratio of 0.18, a quick ratio of 3.03 and a current ratio of 3.83. The firm has a market capitalization of $14.29 billion, a P/E ratio of -267.48 and a beta of 3.67.

Applied Optoelectronics (NASDAQ:AAOI) last issued its quarterly earnings data on Thursday, May 7th. The semiconductor company reported ($0.07) earnings per share for the quarter, missing analysts’ consensus estimates of ($0.05) by ($0.02). Applied Optoelectronics had a negative net margin of 8.55% and a negative return on equity of 4.64%. The company had revenue of $151.14 million during the quarter, compared to the consensus estimate of $156.98 million. During the same period in the previous year, the business posted ($0.02) earnings per share. The firm’s revenue was up 51.3% on a year-over-year basis. Applied Optoelectronics has set its Q2 2026 guidance at -0.030-0.030 EPS. Sell-side analysts predict that Applied Optoelectronics, Inc. will post 0.6 earnings per share for the current fiscal year.

Insiders Place Their Bets

In other Applied Optoelectronics news, Director Cynthia Delaney sold 56,575 shares of Applied Optoelectronics stock in a transaction that occurred on Tuesday, May 26th. The stock was sold at an average price of $189.23, for a total value of $10,705,687.25. Following the transaction, the director directly owned 59,647 shares of the company’s stock, valued at $11,287,001.81. The trade was a 48.68% decrease in their position. The sale was disclosed in a filing with the SEC, which is available at the SEC website. Also, insider Shu-Hua (Joshua) Yeh sold 39,154 shares of Applied Optoelectronics stock in a transaction that occurred on Tuesday, May 19th. The stock was sold at an average price of $173.26, for a total value of $6,783,822.04. Following the completion of the transaction, the insider directly owned 462,430 shares in the company, valued at approximately $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. Insiders sold 298,833 shares of company stock worth $51,058,370 in the last three months. 3.80% of the stock is owned by insiders.

Institutional Inflows and Outflows

Several institutional investors have recently added to or reduced their stakes in the business. Shariaportfolio Inc. bought a new position in Applied Optoelectronics in the 1st quarter worth approximately $1,855,000. NewEdge Advisors LLC bought a new position in Applied Optoelectronics in the 1st quarter worth approximately $723,000. BankChampaign National Association bought a new position in Applied Optoelectronics in the 1st quarter worth approximately $284,000. Janus Henderson Group PLC increased its position in Applied Optoelectronics by 23.2% in the 1st quarter. Janus Henderson Group PLC now owns 29,755 shares of the semiconductor company’s stock worth $2,518,000 after buying an additional 5,600 shares during the period. Finally, California State Teachers Retirement System increased its position in Applied Optoelectronics by 23.2% in the 1st quarter. California State Teachers Retirement System now owns 70,464 shares of the semiconductor company’s stock worth $5,961,000 after buying an additional 13,265 shares during the period. 61.70% of the stock is 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.