Applied Optoelectronics (NASDAQ:AAOI) Upgraded to Hold at Wall Street Zen

Wall Street Zen upgraded shares of Applied Optoelectronics (NASDAQ:AAOI) from a sell rating to a hold rating in a research report released on Saturday morning.

Other equities research analysts have also issued research reports about the stock. Rosenblatt Securities reissued a “buy” rating and issued a $220.00 price target on shares of Applied Optoelectronics in a report on Friday. Weiss Ratings reaffirmed a “sell (d-)” rating on shares of Applied Optoelectronics in a report on Tuesday, July 7th. B. Riley Financial reiterated a “neutral” rating on shares of Applied Optoelectronics in a research report on Friday. Needham & Company LLC lowered their target price on shares of Applied Optoelectronics from $220.00 to $190.00 and set a “buy” rating on the stock in a research note on Friday. Finally, Raymond James Financial set a $151.00 price target on shares of Applied Optoelectronics in a research report on Friday. Three equities research analysts have rated the stock with a Buy rating, two have given a Hold rating and one has assigned a Sell rating to the stock. Based on data from MarketBeat, the stock has an average rating of “Hold” and an average target price of $134.00.

Applied Optoelectronics Stock Performance

AAOI opened at $135.63 on Friday. The stock has a market cap of $10.88 billion, a PE ratio of -173.88 and a beta of 3.76. The company has a current ratio of 3.83, a quick ratio of 3.03 and a debt-to-equity ratio of 0.18. Applied Optoelectronics has a 1 year low of $18.50 and a 1 year high of $233.67. The stock’s 50 day simple moving average is $137.34 and its 200-day simple moving average is $118.14.

Applied Optoelectronics (NASDAQ:AAOI) last issued its earnings results on Thursday, August 6th. The semiconductor company reported $0.06 EPS for the quarter, beating analysts’ consensus estimates of $0.02 by $0.04. The business had revenue of $191.92 million during the quarter, compared to analyst estimates of $190.48 million. Applied Optoelectronics had a negative return on equity of 2.52% and a negative net margin of 9.57%.Applied Optoelectronics’s revenue was up 86.3% on a year-over-year basis. During the same period in the prior year, the company posted ($0.16) earnings per share. Applied Optoelectronics has set its Q3 2026 guidance at 0.110-0.260 EPS. Sell-side analysts forecast that Applied Optoelectronics will post 0.6 EPS for the current year.

Insider Transactions at Applied Optoelectronics

In other news, insider Hung-Lun (Fred) Chang sold 40,329 shares of the business’s stock in a transaction on Wednesday, June 17th. The shares were sold at an average price of $170.60, for a total value of $6,880,127.40. Following the sale, the insider owned 286,124 shares in the company, valued at approximately $48,812,754.40. The trade was a 12.35% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CEO Chih-Hsiang (Thompson) Lin sold 59,000 shares of the business’s stock in a transaction on Friday, June 12th. The shares were sold at an average price of $166.53, for a total transaction of $9,825,270.00. Following the completion of the sale, the chief executive officer owned 1,302,436 shares in the company, valued at $216,894,667.08. This represents a 4.33% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Over the last ninety days, insiders sold 506,215 shares of company stock valued at $87,409,447. 3.80% of the stock is owned by insiders.

Institutional Investors Weigh In On Applied Optoelectronics

A number of hedge funds have recently made changes to their positions in the company. BlackRock Inc. bought a new position in shares of Applied Optoelectronics in the second quarter valued at approximately $955,672,000. Invesco Ltd. grew its position in Applied Optoelectronics by 5,208.9% during the 4th quarter. Invesco Ltd. now owns 3,512,309 shares of the semiconductor company’s stock worth $122,439,000 after acquiring an additional 3,446,150 shares during the last quarter. Price T Rowe Associates Inc. MD grew its position in Applied Optoelectronics by 5,321.6% during the 4th quarter. Price T Rowe Associates Inc. MD now owns 2,229,757 shares of the semiconductor company’s stock worth $77,730,000 after acquiring an additional 2,188,630 shares during the last quarter. Morgan Stanley increased its holdings in Applied Optoelectronics by 157.1% during the 4th quarter. Morgan Stanley now owns 1,699,855 shares of the semiconductor company’s stock valued at $59,257,000 after purchasing an additional 1,038,775 shares in the last quarter. Finally, Hawk Ridge Capital Management LP increased its holdings in Applied Optoelectronics by 106.2% during the 4th quarter. Hawk Ridge Capital Management LP now owns 1,700,900 shares of the semiconductor company’s stock valued at $59,293,000 after purchasing an additional 875,903 shares in the last quarter. Institutional investors and hedge funds own 61.70% of the company’s stock.

Key Stories Impacting Applied Optoelectronics

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

• Positive Sentiment: Q2 results exceeded expectations: Applied Optoelectronics reported adjusted EPS of $0.06 versus consensus estimates near $0.02–$0.03. Revenue reached approximately $191.9 million, ahead of estimates and up about 86% year over year from $103 million. Applied Optoelectronics Q2 Earnings Beat Estimates, Revenues Up Y/Y
• Positive Sentiment: AI datacenter demand is accelerating: Growth was driven by datacenter products, including rapidly expanding 800G optical transceivers. Management is also increasing capacity for 800G and 1.6T products, with demand reportedly exceeding available supply through at least mid-2027. AAOI Q2 Earnings Call Focuses on Capacity-Led 800G Ramp
• Positive Sentiment: Analyst support and industry momentum helped sentiment: Rosenblatt Securities reaffirmed its “buy” rating and assigned a $220 price target. Photonics and optics companies also benefited from strong sector earnings and expectations that potential U.S. restrictions on Chinese optical-transceiver imports could reduce overseas competition. Benzinga analyst rating report
• Neutral Sentiment: Expansion is being limited by supply: Management said it could sell more products if it had greater manufacturing capacity. Component shortages are expected to constrain near-term growth, even as they demonstrate strong underlying demand. Applied Optoelectronics says it could sell more if it could make more
• Negative Sentiment: Q3 profit guidance disappointed: The company forecast EPS of $0.11–$0.26, below the roughly $0.27 analyst consensus, although projected revenue of $255 million–$290 million brackets consensus near $265.7 million. Analysts also flagged competition, a setback in 100G products and valuation concerns after the stock’s substantial rally. Applied Optoelectronics slides amid mixed Q2 results and guidance

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.