AAOI Stock Pulls Back From 8-Year High As Traders Brace For Q4 Earnings

AI-based growth is pushing investor and retail optimism on Applied Optoelectronics higher as more data center growth continues to sprout.

• In early February, the company announced the construction of its new 210,000-square-foot manufacturing facility at 1111 Gillingham St. in Sugar Land, Texas.
• Wall Street analysts are expecting Applied Optoelectronics to post fourth-quarter revenue of $131.56 million, a 31.2% increase from a year earlier, according to data from Fiscal AI.
• The stock closed 10% higher on Friday, hitting an over eight-year high of $51.68.

Applied Optoelectronics, Inc. shares fell nearly 3% in overnight trading and are poised to snap a two-session winning streak when markets open Monday, as investors look for updates on the company’s new U.S. manufacturing facility and its AI data center product pipeline.

The stock surged 10% on Friday, reaching an eight-year high of $51.68. Shares are up nearly 49% so far this year, a sharp reversal from the 5% decline recorded last year.

Applied Optoelectronics develops and manufactures advanced optical and hybrid fiber-coax (HFC) networking products that serve as critical infrastructure for AI data centers, CATV, and broadband fiber access networks. The company supplies tier-one customers across cloud computing, broadband, telecom, and fiber-to-the-home markets.

AAOI’s Earnings Expectations

Wall Street analysts are expecting Applied to post fourth-quarter revenue of $131.56 million, a 31.2% increase from a year earlier, and are estimated to post a loss of $0.11, compared with a loss of $0.02 a year ago, according to data compiled by Fiscal AI.

The company is expected to post its quarterly results on Thursday after market close. Last quarter, the company said that it continued to make progress on customer qualifications for its 800G products. The company then said it was in the final stages of qualification with several customers. Applied Optoelectronics said its 800G QSFP-DD module offers “unparalleled data flow,” setting the stage for next-generation optical connectivity.

“We expect qualification in the near term based on conversations that we are having with our customers, and we continue to believe that we will produce meaningful shipments of 800G products in the fourth quarter,” CFO Stefan Murray said.

Manufacturing Expansion

In early February, the company announced the construction of its new 210,000-square-foot manufacturing facility at 1111 Gillingham St. in Sugar Land, Texas.

“The commencement of construction on our new manufacturing facility in Sugar Land marks an important milestone for AOI,” said CEO Thompson Lin. The company plans to increase its investment in this facility and headquarters from $150 million to potentially $300 million by the end of 2027. This will position the company as one of the largest domestic suppliers of optical transceivers for the AI and data center industry.

The company has R&D facilities in Atlanta, and engineering and manufacturing facilities at its corporate headquarters in Sugar Land, Texas, as well as in Taipei, Taiwan and Ningbo, China.

What Is Retail Thinking?

Retail sentiment on Applied Optoelectronics was in the ‘bullish’ territory, compared with ‘bearish’ a week ago, with message volumes at ‘high’ levels, according to data from Stocktwits.

A user on Stocktwits expects the stock to hit $35.

Shares of Applied Optoelectronics have gained 88% in the last 12 months.

For updates and corrections, email newsroom[at]stocktwits[dot]com.<