Applied Optoelectronics, Inc. (AAOI) Stock Analysis
Range Bound setup
Technology · Communication Equipment
Sell if holding. Engine safety override at $175.41: a dimension score below its floor triggers a hard block regardless of the otherwise-positive setup — overall score 4.6/10. Specifically: High short interest: 13%; Below-average business quality; Rich valuation.
Applied Optoelectronics designs and manufactures fiber-optic networking products across data center, CATV, telecom, and FTTH markets using a vertically integrated model including proprietary laser fabrication in Sugar Land, Texas. Revenue grew to $455.7M in 2025 (53.8% CATV,... Read more
Sell if holding. Engine safety override at $175.41: a dimension score below its floor triggers a hard block regardless of the otherwise-positive setup — overall score 4.6/10. Specifically: High short interest: 13%; Below-average business quality; Rich valuation. Chart setup: RSI 48 mid-range, Bollinger mid-band. Score 4.6/10, moderate confidence.
Passes 5/8 gates (clean insider activity, news events none recent, earnings proximity 50d clear, semi cycle peak clear, materials cycle peak clear). Fails on weak momentum and favorable risk/reward ratio and SEC filing concern. Suitability: aggressive.
About Applied Optoelectronics, Inc.
About Applied Optoelectronics, Inc.
Digicomm and Microsoft together represented 81.9% of Applied Optoelectronics' $455.7 million in 2025 revenue, with Digicomm's share rising from 34.1% in 2024 to 53.1%. The top ten customers accounted for 96.6% of 2025 revenue. CATV generated 53.8% and the internet data center market 42.9% of 2025 revenue; revenue nearly doubled from $249.4 million in 2024.
The company sells fiber-optic products at three integration levels — components, modules, and turn-key equipment — to CATV equipment vendors, MSOs directly under the Quantum Bandwidth brand, and hyperscale data center operators. In the CATV market, DOCSIS 4.0 equipment upgrades drove nearly all 2025 CATV product sales. In data center, demand for 800 Gbps and above transceivers was propelled by AI workloads from hyperscale operators. Applied Optoelectronics vertically integrates laser fabrication using both MBE and MOCVD processes — a capability the company believes is unique in high-volume communications laser production. The high fixed cost base associated with this vertical integration means gross margin is sensitive to volume shifts; gross margin was 30.0% in 2025 versus 24.8% in 2024 as revenue rose sharply.
Show full overview
Digicomm represented 53.1% of Applied Optoelectronics' revenue in 2025, a concentration that rose from 11.3% in 2023, creating an outsized dependency on a single CATV market customer. The company does not maintain long-term contracts, relying instead on recurring purchase orders that customers may increase, decrease, cancel or delay without significant penalty per the 10-K. The top ten customers together represented 96.6% of 2025 revenue, leaving virtually no revenue base outside a handful of named accounts.
See also: Technology · Communication Equipment
From Applied Optoelectronics, Inc.'s most recent 10-K filing, extracted June 9, 2026.
Recent developments
updated 2026-06-17Recent Developments — Applied Optoelectronics, Inc.
Latest news
- NEWS Applied Optoelectronics Shares Are Climbing Monday: What's Driving The Action? — benzinga Jun 15, 2026 positive
- NEWS Here's How Much $1000 Invested In Applied Optoelectronics 10 Years Ago Would Be Worth Today — benzinga Jun 12, 2026 positive
- NEWS Cramer Backs BlackBerry, Waves Off Transocean And Sends AI Investors To Corning — benzinga Jun 11, 2026 negative
- NEWS Forget Micron: These Two Russell 2000 Stocks Are Quietly Delivering Triple-Digit Gains — benzinga Jun 11, 2026 positive
- NEWS Caseys General Stores Upbeat Q4 Earnings, Joins Applied Optoelectronics, Clover Health Investments And Other Big Stocks — benzinga Jun 10, 2026 positive
Generated 2026-06-17T12:16:48Z.
Upcoming dated catalysts
Thesis
Key Metrics
Quality Signals
Options Flow
Concentration Risks(10-K Item 1A)
- HIGHCustomerDigicomm53%10-K Item 1A: 'In 2025, Digicomm represented 53.1% of our revenue and Microsoft represented 28.8% of our revenue'
- MEDIUMCustomerMicrosoft29%10-K Item 1A: 'In 2025, Digicomm represented 53.1% of our revenue and Microsoft represented 28.8% of our revenue'
- HIGHCustomertop ten customers97%10-K Item 1A: 'our top ten customers represented 96.6%, 95% and 92.7% of our revenue, respectively'
Material Events(8-K, last 90d)
- 2026-06-05Item 5.02LOWShareholders approved Applied Optoelectronics' 2026 Equity Incentive Plan at the June 4, 2026 Annual Meeting, authorizing 2,500,000 additional shares. Replaces the prior 2021 and 2013 equity plans. No officer departure or appointment cited.SEC filing →
- 2026-05-08Item 4.01HIGHAudit Committee dismissed Grant Thornton LLP as AAOI's independent registered public accounting firm on May 4, 2026, following a competitive selection process. Dismissal does not affect Grant Thornton's Q1 2026 review engagement. No disagreements with Grant Thornton cited.SEC filing →
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
Show full disclosure ▾Hide full disclosure ▴
About TrendMatrix. TrendMatrix is a publisher of general securities research and market commentary. We publish on a regular schedule. All content is the same for every subscriber in a tier — we do not provide personalized investment advice and we do not take into account any individual subscriber's financial situation, investment objectives, risk tolerance, tax situation, or holdings.
Not investment advice. TrendMatrix is not a registered investment adviser. Our content is for informational and educational purposes only. Consult your own licensed investment adviser, broker, or tax professional before making any investment decision.
Conflicts and positions. The TrendMatrix editorial team frequently holds personal long-term positions in securities discussed. We disclose positions held at the time of publication on each piece. We maintain a trading-window policy: we do not initiate or close positions in the same direction as a TrendMatrix publication within 24 hours before or 72 hours after publication.
No paid promotion. TrendMatrix does not accept payment from any issuer, broker, or third party in exchange for coverage of any security. Our sole compensation is subscription revenue.
No fiduciary duty. No fiduciary, advisory, or agency relationship is created between you and TrendMatrix by reading our content or subscribing to our service.
Performance. Past performance is not indicative of future results. Performance figures reflect the published model only and do not reflect any individual subscriber's actual results.
Rating Breakdown
5 floor-breakers·1 ceiling hit
Hyper-growth tech sacrificing current profitability for scale. Floor tripped because model treats negative margins uniformly; the growth dimension tells the other half of the story.static
Ranks in the bottom of its industry peers on the composite signal. Better names in the same sector exist.static
Momentum below the gate floor. Component breakdown shows what dragged the score down.static
Priced at a premium — multiples above sector norms. Needs delivery on growth + margins to justify.static
No near-term catalyst priced in. Thesis progression will come from fundamentals grinding, not event reaction.static
Price Targets
Position Sizing
Risk Alerts
Earnings
Verdict History
Frequently Asked Questions
Sell if holding. Engine safety override at $175.41: a dimension score below its floor triggers a hard block regardless of the otherwise-positive setup — overall score 4.6/10. Specifically: High short interest: 13%; Below-average business quality; Rich valuation. Chart setup: RSI 48 mid-range, Bollinger mid-band. Prior stop was $158.85. Score 4.6/10, moderate confidence.
Take-profit target: $205.45 (+20.3% upside). Prior stop was $158.85. Stop-loss: $158.85.
Concentration risk — Customer: Digicomm (53.1%); Concentration risk — Customer: top ten customers (96.6%); Target reached (-22.9% upside).
Applied Optoelectronics, Inc. trades at a P/E of N/A (forward 35.8). TrendMatrix value score: 3.2/10. Verdict: Sell.
13 analysts cover AAOI with a consensus score of 3.8/5. Average price target: $151.
What does Applied Optoelectronics, Inc. do?Applied Optoelectronics designs and manufactures fiber-optic networking products across data center, CATV, telecom, and...
Applied Optoelectronics designs and manufactures fiber-optic networking products across data center, CATV, telecom, and FTTH markets using a vertically integrated model including proprietary laser fabrication in Sugar Land, Texas. Revenue grew to $455.7M in 2025 (53.8% CATV, 42.9% data center); Digicomm (53.1%) and Microsoft (28.8%) are the two largest customers.