Applied Optoelectronics (NASDAQ:AAOI) Trading Down 6.9% – Should You Sell?

Applied Optoelectronics, Inc. (NASDAQ:AAOI) shares traded down 6.9% on Wednesday . The stock traded as low as $37.10 and last traded at $36.5670. 1,467,132 shares changed hands during trading, a decline of 68% from the average session volume of 4,531,667 shares. The stock had previously closed at $39.26.

Analyst Upgrades and Downgrades

Several brokerages have commented on AAOI. Weiss Ratings reiterated a “sell (d-)” rating on shares of Applied Optoelectronics in a research note on Wednesday, October 8th. Northland Securities set a $45.00 target price on Applied Optoelectronics in a report on Thursday, December 11th. Needham & Company LLC increased their price target on Applied Optoelectronics from $38.00 to $43.00 and gave the company a “buy” rating in a research note on Thursday, December 11th. B. Riley restated a “sell” rating and set a $15.00 price target on shares of Applied Optoelectronics in a report on Monday, November 10th. Finally, Rosenblatt Securities reaffirmed a “buy” rating and issued a $50.00 price objective on shares of Applied Optoelectronics in a research note on Friday, December 19th. Four equities research analysts have rated the stock with a Buy rating, one has issued a Hold rating and two have assigned a Sell rating to the stock. Based on data from MarketBeat.com, the stock presently has a consensus rating of “Hold” and a consensus target price of $35.60.

Applied Optoelectronics Price Performance

The company has a current ratio of 2.31, a quick ratio of 1.63 and a debt-to-equity ratio of 0.23. The firm’s 50-day moving average price is $30.89 and its 200-day moving average price is $28.61. The stock has a market capitalization of $2.62 billion, a PE ratio of -11.92 and a beta of 3.26.

Applied Optoelectronics (NASDAQ:AAOI) last issued its quarterly earnings data on Thursday, November 6th. The semiconductor company reported ($0.09) earnings per share for the quarter, topping the consensus estimate of ($0.10) by $0.01. Applied Optoelectronics had a negative return on equity of 7.34% and a negative net margin of 36.97%.The company had revenue of $118.63 million for the quarter, compared to analysts’ expectations of $119.77 million. During the same period in the previous year, the firm posted ($0.21) earnings per share. The firm’s revenue for the quarter was up 82.1% on a year-over-year basis. Applied Optoelectronics has set its Q4 2025 guidance at -0.130–0.040 EPS. On average, equities analysts forecast that Applied Optoelectronics, Inc. will post -1.18 EPS for the current fiscal year.

Insider Buying and Selling at Applied Optoelectronics

In related news, CFO Stefan J. Murry sold 934 shares of the firm’s stock in a transaction on Tuesday, January 13th. The stock was sold at an average price of $35.00, for a total value of $32,690.00. Following the completion of the sale, the chief financial officer directly owned 283,037 shares in the company, valued at $9,906,295. This trade represents a 0.33% decrease in their ownership of the stock. The sale was disclosed in a filing with the Securities & Exchange Commission, which is available through this hyperlink. Also, insider David C. Kuo sold 12,500 shares of Applied Optoelectronics stock in a transaction on Tuesday, December 23rd. The stock was sold at an average price of $40.15, for a total transaction of $501,875.00. Following the transaction, the insider directly owned 130,948 shares of the company’s stock, valued at $5,257,562.20. The trade was a 8.71% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. Insiders have sold a total of 16,500 shares of company stock worth $638,126 in the last 90 days. 4.50% of the stock is currently owned by insiders.

Hedge Funds Weigh In On Applied Optoelectronics

A number of large investors have recently made changes to their positions in AAOI. CloudAlpha Capital Management Limited Hong Kong raised its position in Applied Optoelectronics by 410.7% in the 2nd quarter. CloudAlpha Capital Management Limited Hong Kong now owns 1,408,983 shares of the semiconductor company’s stock worth $36,197,000 after purchasing an additional 1,133,115 shares during the period. Hawk Ridge Capital Management LP purchased a new position in shares of Applied Optoelectronics during the third quarter valued at approximately $21,392,000. Alyeska Investment Group L.P. bought a new position in shares of Applied Optoelectronics during the third quarter valued at approximately $19,738,000. Vanguard Group Inc. raised its holdings in shares of Applied Optoelectronics by 13.6% in the third quarter. Vanguard Group Inc. now owns 4,624,570 shares of the semiconductor company’s stock worth $119,915,000 after buying an additional 551,910 shares during the period. Finally, Citigroup Inc. raised its holdings in shares of Applied Optoelectronics by 60.0% in the third quarter. Citigroup Inc. now owns 1,160,456 shares of the semiconductor company’s stock worth $30,091,000 after buying an additional 435,349 shares during the period. 61.70% of the stock is owned by hedge funds and other 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.