Applied Optoelectronics, Inc. (AAOI) - Stock Analysis
Last updated: Jan 18, 2026
Research Idea
Research content for general circulation. Not individualized advice. Methodology & Disclosures
Applied Optoelectronics has exceptional momentum with 82% YoY revenue growth, record Q3 sales, strong 21-day 59% price surge, and advances in 400G/800G transceivers aligned with AI infrastructure demand and capacity expansion, marking it as a short-term growth leader.
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AI Analyst Overview
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Valuation Metrics
Fundamental Analysis
Key Financial Insights: ⢠Improved liquidity ⢠Narrowed losses ⢠Cash-conversion risk AAOI shows materially improved liquidity and sharply narrowed losses through 2025-Q3âcash, current ratio, and equity rose and margins recovered toward break-evenâhowever negative free cash flow, large accumulated retained losses, and sizable inventory/receivables pose material cash-conversion risk.
Price Behavior
Key Price Behavior Insights: ⢠Sharp rebound ⢠Sideways consolidation ⢠Firm support Support Level: $33â$34 Resistance Level: $38â$39 AAOI has stabilized over the last month after a volatile sharp rebound from ~$29 to >$39, but is consolidating with firm support near $33â$34 and resistance around $38â$39 awaiting a decisive breakout or breakdown.
Sentiment & News
Key News Insights: ⢠800G volume order ⢠Q4 revenue lift ⢠insider selling AAOI surged on an 800G hyperscaler volume win and stronger dataâcenter demand but faces nearâterm risk from recent share volatility and significant insider selling.
AI Summary
AAOI has shifted from a technology promise to a capitalâintensive scaleâup where the investment outcome now hinges on execution â specifically on-time qualification/shipment of 800G volumes, converting $170M inventory and $224M receivables into revenue, and achieving a FCF inflection as capex continues. Monitor shipment/qualification milestones, cash runway/ATM proceeds, and any slippage in hyperscaler orders or customer payments; failure to hit these will rapidly force dilution or a material reârating.
Description
Applied Optoelectronics, Inc. designs, manufactures and sells fiberâoptic components and system-level networking equipment for global customers, including data center operators, cable and telecom equipment manufacturers, and internet service providers. The company distributes its products through both direct and indirect channels and is headquartered in Sugar Land, Texas; it was incorporated in 1997.
Idea History
| Date | Close | Ticker | Company | Summary | Status | P/L |
|---|---|---|---|---|---|---|
| Dec 25 | Jan 1 | AAOI | Applied Optoelectronics, Inc. | Applied Optoelectronics has exceptional momentum with 82% YoY revenue growth, record Q3 sales, strong 21-day 59% price surge, and advances in 400G/800G transceivers aligned with AI infrastructure demand and capacity expansion, marking it as a short-term growth leader. | Closed | -15.0% |