Applied Optoelectronics, Inc. (AAOI) AI Stock Analysis

Founded in 1997 and headquartered in Sugar Land, Texas, Applied Optoelectronics, Inc. specializes in the design, manufacturing, and global sales of fiber-optic networking products. Its extensive product catalog includes optical modules, lasers, subassemblies, transmitters, transceivers, turn-key equipment, and headend, node, and distribution hardware. The company serves internet data center operators, cable television and telecom equipment manufacturers, and internet service providers through both direct and indirect sales channels. Operating with 4,691 employees, it focuses research and development on enhancing product performance, lowering costs, and meeting increasing global bandwidth demands.

Applied Optoelectronics achieved a 5-year revenue CAGR of 14.2% between FY2020 and FY2025. Annual revenue fell 2.3% in FY2023 to $217.6M before accelerating 14.6% to $249.4M in FY2024 and 82.8% to $455.7M in FY2025. Gross margin expanded from 17.8% in FY2021 to 30.0% in FY2025, while operating margin improved from -26.8% to -12.0%. Net income remained negative across all five fiscal years, posting -$38.2M in FY2025 compared to -$186.7M in FY2024. For the latest quarter ended June 30, 2026, quarterly revenue rose 86.4% year-over-year, bringing trailing twelve month revenue to $596.0M with an EPS of -$0.75.

As of June 30, 2026, Applied Optoelectronics held $499.7M in cash and short-term investments against $264.5M in total debt, giving it net cash of $235.2M. Liquidity is supported by a current ratio of 2.78 and a debt-to-equity ratio of 0.16 against $1.67B in shareholders' equity. In FY2025, operating cash flow stood at -$174.4M and capital expenditures were $179.1M, yielding free cash flow of -$353.6M. Over the past 5 years, the company's share count increased by 200.2%.

At $75.57 on October 16, 2026, Applied Optoelectronics trades at a market capitalization of $6.42B and an enterprise value of $8.38B. The stock is valued at a forward P/E of 84.0x, a price-to-sales ratio of 10.8x, and an EV/EBITDA of 38.4x. These valuation multiples are above the median of its US-listed Technology peers, which trades at a forward P/E of 18.8x, price-to-sales of 2.8x, and EV/EBITDA of 16.6x. Over the past year, AAOI shares returned 142.7% and 946.7% over 5 years, compared to 16.8% and 83.0% for the S&P 500 (SPY).

Wall Street coverage consists of 1 Strong Buy, 2 Buy, and 3 Hold ratings, with zero Sell ratings. The mean price target is $160.00, representing an upside of 111.7% from the last close of $75.57. For the fiscal year ending December 31, 2026, consensus estimates project revenue of $1.04B and EPS of $0.68. For FY2027, 5 analysts project revenue of $2.66B and EPS of $4.60. The company beat EPS estimates in 1 of the last 4 quarters and is scheduled to report earnings next on November 5, 2026.

This page is an AI-written research summary of Applied Optoelectronics, Inc. (AAOI). The text was generated on October 30, 2026 from Quotelinks data as of October 16, 2026 (company profile, annual results, latest balance sheet, valuation, price performance and analyst estimates). An automatic check rejects any draft that contains a figure not found in that data. It is not investment advice; verify figures on the linked tabs before making decisions.

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