In a post on X, the former hedge-fund manager and well-known short seller wrote that he is “shorting $AAOI on the pop,” adding that “one year of bottleneck on a commodity product does not make a great company.”

  • Shkreli’s thesis frames the company’s recent strength as the product of a short-lived supply crunch in optical transceivers used in AI data centers, rather than durable competitive advantages.
  • Applied Optoeletronics did not immediately respond to Stocktwits’s request for comment.
  • Applied Optoelectronics reported second-quarter results after market close on Thursday that beat expectations and marked a return to adjusted profitability.

‘Pharma bro’ Martin Shkreli announced on Friday that he is shorting shares of Applied Optoelectronics (AAOI) following a sharp post-earnings rally, adding that temporary supply constraints on a commodity product do not transform the company into a high-quality long-term winner.

Shreli’s Thesis 

In a post on X, the former hedge-fund manager and well-known short seller wrote that he is “shorting $AAOI on the pop,” adding that “one year of bottleneck on a commodity product does not make a great company.”

The comment came as AAOI shares climbed more than 11% in Friday trading after the company reported second-quarter earnings on Thursday evening. AAOI shares jumped more than 10% in early premarket trading as well, with peers POET Technologies, Coherent and Lumentum rising 3%, 4.5% and 3.5% in sympathy. 

Shkreli’s thesis frames the company’s recent strength as the product of a short-lived supply crunch in optical transceivers used in AI data centers, rather than durable competitive advantages. Investor interest in photonics firms has surged over the past year as hyperscalers ramp up AI infrastructure spending. 
Optical components are widely viewed as relatively interchangeable once production capacity expands across the industry.

Applied Optoeletronics did not immediately respond to Stocktwits’s request for comment.

Record Quarter Driven By AI Demand

Applied Optoelectronics reported second-quarter results after market close on Thursday that beat expectations and marked a return to adjusted profitability. Revenue reached a record $191.9 million, up 86% year-over-year and 27% sequentially, slightly above consensus estimates near $190.5 million. Adjusted earnings came in at $0.06 per share, topping forecasts of $0.03.

Applied Optoelectronics’ data-center business, the company’s main growth engine, delivered $107.7 million in sales last quarter—up a striking 140% from a year earlier—as AI-driven demand for ultra-fast connections kept accelerating. At the heart of that surge were the firm’s newest 800G optical transceivers, specialized modules that convert electrical signals into light and push data across fiber-optic cables at 800 gigabits per second. Revenue from these high-speed units more than doubled from the prior quarter to $12.8 million. Meanwhile, the previous-generation 400G modules—running at half that speed, or 400 gigabits per second—still contributed a solid $48.4 million, climbing 27% sequentially as many data centers continue upgrading in stages rather than jumping straight to the newest hardware. 

Outside the AI world, the company’s CATV segment, which supplies lasers, amplifiers and other optical gear to cable-television and broadband operators for carrying video and internet signals over hybrid fiber-coaxial networks, posted its own record $80.6 million, showing that traditional infrastructure demand remains a meaningful second engine even as data-center optics dominate the growth story.

Guidance Highlights Ongoing Capacity Limits

For the third quarter, the company guided revenue of $255–290 million and adjusted earnings of $0.11–$0.26 per share. Analysts had expected EPS of $0.28 on revenue of $278.3 million, meaning the forecasts missed targets. 
Full-year 2026 revenue is expected near $1.1 billion, constrained by manufacturing capacity rather than customer demand.

CEO Thompson Lin said demand for 800G and emerging 1.6T products is forecast to outpace production through mid-2027. The company is rapidly expanding capacity from roughly 200,000 units per month toward more than 650,000 by year-end 2026.

How Did AAOI Retail Traders React?

On Stocktwits, retail sentiment around AAOI stayed within the ‘extremely bullish’ territory over the past 24 hours, while message volume rose from high to ‘extremely high’ levels. 

A Stocktwits user echoed Shkreli’s opinion, saying nothing fundamental has improved at the company.

A more bullish user, however, opined that the stock can keep rising because the company is quickly ramping up production of next-gen optical modules to meet AI demand that already exceeds what it can make.

AAOI stock has gained nearly 300% year-to-date.

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