Applied Optoelectronics (NASDAQ:AAOI) Shares Down 7.1% – Should You Sell?

Applied Optoelectronics, Inc. (NASDAQ:AAOI)’s stock price traded down 7.1% during mid-day trading on Wednesday . The stock traded as low as $145.55 and last traded at $139.9230. 1,782,751 shares traded hands during mid-day trading, a decline of 81% from the average session volume of 9,230,093 shares. The stock had previously closed at $150.57.

Wall Street Analyst Weigh In

Several research analysts recently issued reports on the stock. Needham & Company LLC upped their target price on shares of Applied Optoelectronics from $43.00 to $80.00 and gave the stock a “buy” rating in a research report on Friday, February 27th. Northland Securities reiterated a “market perform” rating and issued a $55.00 target price on shares of Applied Optoelectronics in a research report on Friday, February 27th. Rosenblatt Securities reiterated a “buy” rating and issued a $50.00 target price on shares of Applied Optoelectronics in a research report on Thursday, February 19th. Weiss Ratings restated a “sell (d-)” rating on shares of Applied Optoelectronics in a research report on Wednesday, January 21st. Finally, B. Riley Financial upgraded shares of Applied Optoelectronics from a “sell” rating to a “neutral” rating and set a $54.00 price target for the company in a research report on Friday, February 27th. Three research analysts have rated the stock with a Buy rating, three have given a Hold rating and one has assigned a Sell rating to the company. Based on data from MarketBeat, Applied Optoelectronics presently has an average rating of “Hold” and an average target price of $52.80.

Applied Optoelectronics Trading Down 7.8%

The company has a quick ratio of 1.91, a current ratio of 2.63 and a debt-to-equity ratio of 0.18. The stock’s fifty day moving average price is $101.69 and its two-hundred day moving average price is $56.93. The company has a market capitalization of $10.87 billion, a PE ratio of -211.89 and a beta of 3.23.

Applied Optoelectronics (NASDAQ:AAOI) last posted its earnings results on Thursday, February 26th. The semiconductor company reported ($0.01) earnings per share for the quarter, topping analysts’ consensus estimates of ($0.12) by $0.11. The company had revenue of $134.27 million during the quarter, compared to analyst estimates of $131.56 million. Applied Optoelectronics had a negative net margin of 8.39% and a negative return on equity of 5.29%. Applied Optoelectronics’s revenue for the quarter was up 33.9% on a year-over-year basis. During the same period in the prior year, the business posted ($0.02) earnings per share. Applied Optoelectronics has set its Q1 2026 guidance at -0.090-0.000 EPS. Sell-side analysts anticipate that Applied Optoelectronics, Inc. will post 0.66 earnings per share for the current year.

Insider Activity at Applied Optoelectronics

In other Applied Optoelectronics news, insider David C. Kuo sold 29,000 shares of the firm’s stock in a transaction dated Thursday, March 19th. The shares were sold at an average price of $100.13, for a total value of $2,903,770.00. Following the completion of the sale, the insider directly owned 82,663 shares in the company, valued at $8,277,046.19. This trade represents a 25.97% decrease in their ownership of the stock. The sale was disclosed in a filing with the SEC, which is available at this link. Also, Director Min-Chu (Mike) Chen sold 8,835 shares of the firm’s stock in a transaction dated Monday, March 9th. The stock was sold at an average price of $108.72, for a total transaction of $960,541.20. Following the completion of the sale, the director owned 169,300 shares of the company’s stock, valued at $18,406,296. This trade represents a 4.96% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Insiders sold a total of 326,333 shares of company stock valued at $29,802,706 in the last quarter. 4.50% of the stock is currently owned by company insiders.

Institutional Trading of Applied Optoelectronics

Several institutional investors and hedge funds have recently bought and sold shares of AAOI. Allworth Financial LP lifted its holdings in Applied Optoelectronics by 1,923.7% in the fourth quarter. Allworth Financial LP now owns 769 shares of the semiconductor company’s stock worth $27,000 after buying an additional 731 shares during the period. Comerica Bank purchased a new stake in Applied Optoelectronics in the third quarter worth about $28,000. Northwestern Mutual Wealth Management Co. lifted its holdings in Applied Optoelectronics by 166.7% in the fourth quarter. Northwestern Mutual Wealth Management Co. now owns 1,200 shares of the semiconductor company’s stock worth $42,000 after buying an additional 750 shares during the period. Kohmann Bosshard Financial Services LLC purchased a new stake in Applied Optoelectronics in the fourth quarter worth about $55,000. Finally, Headlands Technologies LLC purchased a new stake in Applied Optoelectronics in the second quarter worth about $57,000. 61.70% of the stock is currently owned by hedge funds and other institutional investors.

Applied Optoelectronics Company Profile

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.