AAOI
Applied Optoelectronics, Inc.

Applied Optoelectronics, Inc.AAOI

Technology · Communication Equipment
50.13USD
+6.91%
Nov 08, 2026
AAOI overview ready
Supplier of 800G Optical Transceivers for AI Data Centers
AAOI designs and manufactures optical communication components and modules, including lasers, laser components and high-speed transceivers.
Primary theme is lagging
Optical / Photonics is lagging (-26.6pp vs SPY over 21 sessions; 1 of 12 members ahead of SPY).
Price trend is broken
Longer-term context reads trend under pressure, with a near-term setup of failed reclaim.
The tactical setup reads failed reclaim, but the weekly structure is broken.
Fair valuation
The price broadly reflects the cash the business actually produces, with upside and risk reasonably balanced.
Unremarkable fundamentals
Primary risk
Dependence on cyclical data center and telecom capital spending.
Market Nov 6Filing Sep 30Price action Nov 7Research Sep 28

Conviction Level

PriceAction1.4BusinessPerformance9.0BusinessQuality1.8Valuation4.8ThemeMomentum1.0Accelerating — Revenue growth has accelerated across 4 consecutive quarters, rising from +34% to +128% year over year. Earnings turned positive: diluted EPS of $0.07 against a loss of -$0.28 a year earlier. — Accelerating describes growth momentum measured in recent filed quarters. It is not proof that the acceleration will continue.

Conviction uses Price Action, Business Performance, Business Quality, Valuation. Theme Momentum is research context, not an input.

Theme momentumPrimary theme · group context, not entry timing
vs SPY
−26.6pp
Theme return
−31.6%
Beating SPY
1 of 12
21 sessions to Nov 6, 2026 · Theme Leadership V2
Price
Loading price history…

Price Action

Price trend is broken
Longer-term context reads trend under pressure, with a near-term setup of failed reclaim.
The tactical setup reads failed reclaim, but the weekly structure is broken.
EntryDamaged / breakdown

The technical structure itself is broken across timeframes — the weakest entry profile.

Key Financials

Market Cap
$4.6B
Avg Volume (60D)
11.0M
60 sessions
Revenue Growth YoY
+82.8%
FY2025 vs FY2024
Gross Margin
+28.8%
Trailing twelve months
Operating Margin
-6.8%
Trailing twelve months
Free Cash Flow Yield
-28.8%
Distance from 200DMA
-56.3%
P/E
N/M
EV / Sales
5.4x
Market metrics as of Nov 6, 2026
Financial results for the period ended Sep 30, 2026
Filed balance-sheet data as of Sep 30, 2026

Business Performance

Accelerating

Revenue growth has accelerated across 4 consecutive quarters, rising from +34% to +128% year over year. Earnings turned positive: diluted EPS of $0.07 against a loss of -$0.28 a year earlier.

Latest reported: Q3 FY2026, ended Sep 30
Revenue growthAccelerating
+128%
$270M in Q3 FY2026 · YoY
YoY growth, last 4 quarters
  1. +34%
  2. +51%
  3. +86%
  4. +128%
Earnings growthTurned profitable
$0.07
Diluted EPS $0.07 vs -$0.28 a year earlier · GAAP
Too few comparable EPS quarters: a loss or a turn to profit has no meaningful percentage.
Operating marginExpanding
-0.5%
+14.8 pp YoY · gross margin 28.2% (+0.2 pp)
The business is consuming cash
The share count is rising

Business Quality

1.8 / 10

How well the business earns on its assets, converts earnings to cash and funds itself — read from its SEC filings.

Fundamentals & Valuation

Two of the three valuation perspectives say fair; intrinsic is the dissenting view.
Applied Optoelectronics, Inc. has a Fair valuation stance because the price broadly reflects the cash the business actually produces, with upside and risk reasonably balanced.

What changed

  • APPLIED OPTOELECTRONICS, INC. — 8-K (items 2.02, 9.01)
    Reported on 8-K, dated 2026-11-05. AAOI closed -20.9% against a broad market that moved -4.4%.
    2026-11-05 · source
  • APPLIED OPTOELECTRONICS, INC. — 8-K (items 1.01, 1.02, 2.03, 9.01)
    Reported on 8-K, dated 2026-11-04. AAOI closed -7.3% against a broad market that moved +1.6%.
    2026-11-04 · source
  • AAOI fell 9.5% in one session
    AAOI closed -9.5% while the broad market was close to flat (-0.5%).
    2026-11-02
  • AAOI fell 12.8% in one session
    AAOI closed -12.8% against a broad market that moved -1.8%.
    2026-10-30

Company Research

Thesis
AAOI designs and manufactures optical communication components and modules, including lasers, laser components and high-speed transceivers. Its current growth exposure is increasingly tied to 800G optical transceiver volume for AI-oriented data-center networking, while it also retains CATV, telecom and FTTH product exposure.
Opportunity
High opportunity
Accelerator-cluster and hyperscale data-center investment is driving demand for higher-bandwidth optical links, transceivers, lasers and connectivity infrastructure that move data within and between AI compute fabrics.
Key risk
Dependence on cyclical data center and telecom capital spending.

Economic classification

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Business & Markets

Technology · Communication Equipment
What they do

Applied Optoelectronics designs, manufactures, and sells fiber-optic networking products including optical modules and lasers, operating primarily in the US, Taiwan, and China.

How it earns

The company generates revenue through transactional sales of optical communication components and equipment.

Products & services
Optical modules
Lasers
Transmitters and transceivers
Optical filters
Laser components
Fiber-optic networking equipment
Customers & end markets
Internet data center operators
Cable television providers
Telecom equipment manufacturers
Fiber-to-the-home providers
Internet service providers
Market position

Niche small-cap player with in-house laser fabrication capabilities in the optical transceiver market.

Demand drivers
Medium cyclicality

Demand is influenced by capital expenditure cycles in data centers and telecom infrastructure upgrades.