Wall Street Zen Upgrades Applied Optoelectronics (NASDAQ:AAOI) to “Hold”

Applied Optoelectronics (NASDAQ:AAOI) was upgraded by Wall Street Zen from a “sell” rating to a “hold” rating in a research report issued to clients and investors on Saturday.

AAOI has been the subject of several other research reports. B. Riley Financial raised Applied Optoelectronics from a “sell” rating to a “neutral” rating and upped their price objective for the company from $15.00 to $54.00 in a research note on Friday. Northland Securities reissued a “market perform” rating and set a $55.00 target price on shares of Applied Optoelectronics in a report on Friday. Needham & Company LLC upped their price target on shares of Applied Optoelectronics from $43.00 to $80.00 and gave the company a “buy” rating in a research report on Friday. Weiss Ratings reiterated a “sell (d-)” rating on shares of Applied Optoelectronics in a report on Wednesday, January 21st. Finally, Rosenblatt Securities reissued a “buy” rating and issued a $50.00 price objective on shares of Applied Optoelectronics in a research note on Thursday, February 19th. Three investment analysts have rated the stock with a Buy rating, three have issued a Hold rating and one has assigned a Sell rating to the company. Based on data from MarketBeat, Applied Optoelectronics has a consensus rating of “Hold” and a consensus target price of $52.80.

Applied Optoelectronics Stock Performance

Shares of Applied Optoelectronics stock opened at $84.23 on Friday. The firm has a fifty day moving average of $42.16 and a two-hundred day moving average of $32.72. The company has a debt-to-equity ratio of 0.18, a quick ratio of 1.91 and a current ratio of 2.63. The stock has a market capitalization of $6.33 billion, a price-to-earnings ratio of -129.58 and a beta of 3.19. Applied Optoelectronics has a 52 week low of $9.71 and a 52 week high of $84.31.

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 the consensus estimate of ($0.12) by $0.11. The firm had revenue of $134.27 million for the quarter, compared to analyst estimates of $131.56 million. Applied Optoelectronics had a negative return on equity of 5.29% and a negative net margin of 8.39%.The company’s revenue for the quarter was up 33.9% on a year-over-year basis. During the same period in the previous year, the company posted ($0.02) earnings per share. Applied Optoelectronics has set its Q1 2026 guidance at -0.090-0.000 EPS. As a group, equities research analysts predict that Applied Optoelectronics will post -1.18 EPS for the current year.

Insider Buying and Selling at Applied Optoelectronics

In other news, insider David C. Kuo sold 17,467 shares of the firm’s stock in a transaction dated Wednesday, February 11th. The stock was sold at an average price of $50.17, for a total value of $876,319.39. Following the completion of the sale, the insider directly owned 111,663 shares in the company, valued at $5,602,132.71. This trade represents a 13.53% decrease in their position. The sale was disclosed in a filing with the SEC, which is available at this link. Also, CFO Stefan J. Murry sold 11,693 shares of the stock in a transaction that occurred on Wednesday, February 11th. The stock was sold at an average price of $50.25, for a total value of $587,573.25. Following the completion of the transaction, the chief financial officer owned 290,050 shares in the company, valued at approximately $14,575,012.50. The trade was a 3.88% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. Insiders sold a total of 66,520 shares of company stock valued at $3,080,367 in the last quarter. 4.50% of the stock is currently owned by company insiders.

Institutional Investors Weigh In On Applied Optoelectronics

A number of institutional investors and hedge funds have recently bought and sold shares of the stock. Vanguard Group Inc. raised its stake in shares of Applied Optoelectronics by 7.7% in the fourth quarter. Vanguard Group Inc. now owns 4,982,660 shares of the semiconductor company’s stock valued at $173,696,000 after buying an additional 358,090 shares during the period. Invesco Ltd. increased its holdings in Applied Optoelectronics by 5,208.9% in the 4th quarter. Invesco Ltd. now owns 3,512,309 shares of the semiconductor company’s stock worth $122,439,000 after acquiring an additional 3,446,150 shares during the last quarter. Price T Rowe Associates Inc. MD raised its stake in Applied Optoelectronics by 5,321.6% in the 4th quarter. Price T Rowe Associates Inc. MD now owns 2,229,757 shares of the semiconductor company’s stock valued at $77,730,000 after acquiring an additional 2,188,630 shares during the period. Hawk Ridge Capital Management LP boosted its position in Applied Optoelectronics by 106.2% during the fourth quarter. Hawk Ridge Capital Management LP now owns 1,700,900 shares of the semiconductor company’s stock worth $59,293,000 after purchasing an additional 875,903 shares during the period. Finally, Morgan Stanley increased its stake in shares of Applied Optoelectronics by 157.1% in the fourth quarter. Morgan Stanley now owns 1,699,855 shares of the semiconductor company’s stock worth $59,257,000 after purchasing an additional 1,038,775 shares in the last quarter. 61.70% of the stock is owned by hedge funds and other institutional investors.

Key Applied Optoelectronics News

Here are the key news stories impacting Applied Optoelectronics this week:

• Positive Sentiment: Q4 beat and revenue strength: AAOI reported a $0.01 loss per share vs. consensus -$0.12 and revenue of $134.3M, up ~34% year-over-year — both results topped estimates and underpinned the rally. MarketBeat earnings summary
• Positive Sentiment: Upside revenue guidance: Management raised Q1 2026 revenue guidance to $150M–$165M, above consensus, signaling continued demand — a key driver for investor optimism. GlobeNewswire press release
• Positive Sentiment: Bullish write-up highlighting large growth potential: 247WallStreet published a bullish piece framing AAOI as entering a “10x moment” with aggressive revenue projections that likely boosted speculative buying interest. AAOI’s 10x Moment
• Positive Sentiment: Analyst upgrade / target increase from Needham: Needham raised its price target to $80 and maintained a “buy” rating, lending institutional validation to the recent beat and outlook. Benzinga
• Neutral Sentiment: EPS still a small loss despite beat: The company reported a small GAAP loss but beat the much larger consensus loss estimate — a mixed data point for profitability progress. Zacks
• Neutral Sentiment: Conference call and detailed release available for off-cycle color: Investors should review the earnings call transcript and press release for product, margin and backlog details that will determine sustainability of the beat. Earnings call (Yahoo)
• Negative Sentiment: Some analyst targets remain below current levels: Northland reaffirmed a “market perform” with a $55 target and B. Riley’s $54 target (despite an upgrade to neutral) both imply sizable downside from current prices — a restraint on further upside until fundamentals confirm sustainability. Finviz Benzinga
• Neutral Sentiment: Short-interest data appears inconsistent: Public short-interest reports in the feed show zero shares/NaN changes (likely data errors) — ignore until verified; actual short-covering could amplify moves but current data is unreliable.

About Applied Optoelectronics

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.