Applied Optoelectronics (NASDAQ:AAOI) Stock Price Up 6.9% After Better-Than-Expected Earnings

Applied Optoelectronics, Inc. (NASDAQ:AAOI) shares shot up 6.9% on Friday following a better than expected earnings announcement. The company traded as high as $51.90 and last traded at $50.13. 21,624,004 shares were traded during mid-day trading, an increase of 104% from the average session volume of 10,623,257 shares. The stock had previously closed at $46.89.

The semiconductor company reported $0.17 EPS for the quarter, beating the consensus estimate of $0.14 by $0.03. The company had revenue of $269.88 million for the quarter, compared to analysts’ expectations of $268.11 million. Applied Optoelectronics had a negative return on equity of 1.98% and a negative net margin of 9.57%. Applied Optoelectronics’s revenue was up 127.5% compared to the same quarter last year. During the same period last year, the firm posted ($0.09) earnings per share.

Applied Optoelectronics News Roundup

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

• Positive Sentiment: AAOI reported Q3 EPS of $0.17, topping the $0.14 estimate, and revenue of $269.9 million, slightly above expectations and up 127.5% year over year. The company also returned to GAAP profitability, with datacenter and CATV sales supporting results. Applied Optoelectronics Reports Third Quarter 2026 Results
• Positive Sentiment: Demand for 800G products is strong, and management cited accelerating interest in 1.6T transceivers and a potential $1 billion–$1.5 billion hyperscaler opportunity. The broader AI optical-stock group also rallied, helping lift sentiment. AAOI Q3 Earnings Call Highlights
• Positive Sentiment: Rosenblatt maintained a Buy rating while lowering its price target to $115, still well above the price cited in the report. Rosenblatt Securities recommendations
• Neutral Sentiment: The share move also reflects a broader rebound in AI optical names after recent selling, rather than company-specific news alone. AI optical stocks rebound
• Negative Sentiment: Q4 revenue guidance of $385 million–$420 million came in below the $427.3 million consensus estimate, tempering the strong quarterly report. AAOI Q3 earnings and sales
• Negative Sentiment: Component shortages and delays expanding manufacturing capacity—including power and construction issues at planned U.S. facilities—could limit the company’s ability to meet demand. B. Riley also cut its target to $45 and moved to Neutral. AOI earnings reaction and manufacturing capacity

Analyst Ratings Changes

Several research firms recently weighed in on AAOI. B. Riley Financial lowered their target price on Applied Optoelectronics from $92.00 to $45.00 and set a “neutral” rating on the stock in a research report on Friday. Needham & Company LLC reduced their price target on Applied Optoelectronics from $170.00 to $100.00 and set a “buy” rating for the company in a research report on Friday. Northland Securities upgraded Applied Optoelectronics from a “market perform” rating to an “outperform” rating and set a $120.00 price target for the company in a research report on Monday. Raymond James Financial reaffirmed an “outperform” rating and issued a $178.00 price objective on shares of Applied Optoelectronics in a research note on Tuesday, August 11th. Finally, Weiss Ratings raised Applied Optoelectronics from a “sell (e+)” rating to a “sell (d-)” rating in a research note on Wednesday, October 21st. Four equities research analysts have rated the stock with a Buy rating, one has issued a Hold rating and one has assigned a Sell rating to the stock. Based on data from MarketBeat.com, the company currently has a consensus rating of “Moderate Buy” and an average price target of $111.60.

Insider Buying and Selling at Applied Optoelectronics

In other Applied Optoelectronics news, CFO Stefan Murry sold 4,000 shares of Applied Optoelectronics stock in a transaction that occurred on Monday, October 12th. The stock was sold at an average price of $102.87, for a total value of $411,480.00. Following the sale, the chief financial officer owned 363,168 shares of the company’s stock, valued at $37,359,092.16. The trade was a 1.09% decrease in their position. The transaction was disclosed in a legal filing with the SEC, which is available through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Shu-Hua Yeh sold 6,000 shares of the company’s stock in a transaction on Tuesday, August 18th. The shares were sold at an average price of $147.73, for a total transaction of $886,380.00. Following the sale, the insider directly owned 377,498 shares in the company, valued at approximately $55,767,779.54. The trade was a 1.56% decrease in their position. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders sold 52,172 shares of company stock worth $5,985,036 in the last quarter. 3.80% of the stock is owned by corporate insiders.

Hedge Funds Weigh In On Applied Optoelectronics

Large investors have recently bought and sold shares of the business. Ritholtz Wealth Management purchased a new position in Applied Optoelectronics in the 3rd quarter worth about $476,000. Jacobi Capital Management LLC bought a new stake in Applied Optoelectronics during the 3rd quarter valued at about $33,000. Knights of Columbus Asset Advisors LLC boosted its position in Applied Optoelectronics by 1.1% in the 3rd quarter. Knights of Columbus Asset Advisors LLC now owns 20,427 shares of the semiconductor company’s stock valued at $2,028,000 after buying an additional 221 shares during the period. Matthews International Capital Management LLC purchased a new stake in Applied Optoelectronics in the 3rd quarter valued at about $8,927,000. Finally, AlphaCore Capital LLC boosted its position in Applied Optoelectronics by 125.6% in the 3rd quarter. AlphaCore Capital LLC now owns 4,077 shares of the semiconductor company’s stock valued at $405,000 after buying an additional 2,270 shares during the period. Hedge funds and other institutional investors own 61.70% of the company’s stock.

Applied Optoelectronics Price Performance

The company has a debt-to-equity ratio of 0.12, a quick ratio of 2.13 and a current ratio of 2.78. The firm has a market capitalization of $4.24 billion, a P/E ratio of -64.27 and a beta of 4.04. The stock’s 50 day simple moving average is $94.22 and its 200 day simple moving average is $113.19.

Applied Optoelectronics Company Profile

Applied Optoelectronics, Inc (NASDAQ: AAOI) develops and manufactures fiber-optic networking products and solutions. Its offerings include optical transceivers, transmitters, receivers, lasers, and related components used to transmit data across fiber-optic networks.

The company serves several communications markets, including data centers, broadband access networks, cable television, and telecommunications. Its products are designed for applications such as high-speed data transmission, fiber-to-the-home and other broadband deployments, network connectivity, and communications infrastructure.

Founded in 1997 and headquartered in Sugar Land, Texas, Applied Optoelectronics supports customers in multiple regions, including North America, Asia, and other international markets.