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

Applied Optoelectronics, Inc. (NASDAQ:AAOI) gapped down prior to trading on Thursday . The stock had previously closed at $175.13, but opened at $167.56. Applied Optoelectronics shares last traded at $173.8580, with a volume of 2,968,144 shares changing hands.

Wall Street Analysts Forecast Growth

AAOI has been the topic of a number of research reports. Raymond James Financial reaffirmed an “outperform” rating on shares of Applied Optoelectronics in a report on Wednesday. Wall Street Zen lowered Applied Optoelectronics from a “hold” rating to a “sell” rating in a report on Monday, April 13th. 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 report on Friday, February 27th. Rosenblatt Securities reaffirmed a “buy” rating and issued a $50.00 price objective on shares of Applied Optoelectronics in a report on Thursday, February 19th. Finally, Northland Securities reaffirmed a “market perform” rating and issued a $55.00 price objective on shares of Applied Optoelectronics in a report on Friday, February 27th. Three analysts have rated the stock with a Buy rating, three have assigned a Hold rating and one has assigned a Sell rating to the stock. Based on data from MarketBeat.com, the company presently has a consensus rating of “Hold” and a consensus target price of $79.80.

Applied Optoelectronics Stock Down 5.4%

The company has a debt-to-equity ratio of 0.18, a current ratio of 3.83 and a quick ratio of 3.03. The company has a market capitalization of $13.29 billion, a P/E ratio of -251.28 and a beta of 3.66. The stock has a 50-day moving average price of $160.40 and a 200-day moving average price of $90.38.

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

Insider Activity at Applied Optoelectronics

In related news, insider Hung-Lun (Fred) Chang sold 36,400 shares of Applied Optoelectronics stock in a transaction on Monday, March 16th. The stock was sold at an average price of $100.25, for a total transaction of $3,649,100.00. Following the sale, the insider directly owned 233,618 shares in the company, valued at approximately $23,420,204.50. This trade represents a 13.48% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the SEC, which can be accessed through this link. Also, Director Cynthia Delaney sold 56,575 shares of Applied Optoelectronics stock in a transaction 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 sale, the director owned 59,647 shares in the company, valued at $11,287,001.81. This trade represents a 48.68% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. Insiders have sold 331,233 shares of company stock valued at $54,021,670 over the last 90 days. Corporate insiders own 3.80% of the company’s stock.

Hedge Funds Weigh In On Applied Optoelectronics

Several hedge funds have recently made changes to their positions in the stock. Allworth Financial LP grew its position in Applied Optoelectronics by 1,923.7% during the fourth quarter. Allworth Financial LP now owns 769 shares of the semiconductor company’s stock worth $27,000 after buying an additional 731 shares in the last quarter. Comerica Bank purchased a new position in Applied Optoelectronics during the third quarter worth about $28,000. Northwestern Mutual Wealth Management Co. boosted its holdings in shares of Applied Optoelectronics by 166.7% in the 4th quarter. Northwestern Mutual Wealth Management Co. now owns 1,200 shares of the semiconductor company’s stock worth $42,000 after purchasing an additional 750 shares in the last quarter. Kohmann Bosshard Financial Services LLC purchased a new position in shares of Applied Optoelectronics in the 4th quarter worth about $55,000. Finally, Headlands Technologies LLC purchased a new position in shares of Applied Optoelectronics in the 2nd quarter worth about $57,000. 61.70% of the stock is currently owned by hedge funds and other institutional investors.

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.