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

Applied Optoelectronics, Inc. (NASDAQ:AAOI) shares gapped down before the market opened on Tuesday . The stock had previously closed at $39.10, but opened at $37.64. Applied Optoelectronics shares last traded at $40.6380, with a volume of 735,682 shares traded.

Analysts Set New Price Targets

Several research firms recently commented on AAOI. Northland Securities set a $45.00 price target on shares of Applied Optoelectronics in a research note on Thursday, December 11th. Rosenblatt Securities reiterated a “buy” rating and issued a $50.00 price objective on shares of Applied Optoelectronics in a research note on Friday. B. Riley reissued a “sell” rating and issued a $15.00 price objective on shares of Applied Optoelectronics in a report on Monday, November 10th. Weiss Ratings reaffirmed a “sell (d-)” rating on shares of Applied Optoelectronics in a report on Wednesday, October 8th. Finally, Needham & Company LLC lifted their price target on shares of Applied Optoelectronics from $38.00 to $43.00 and gave the company a “buy” rating in a research report on Thursday, December 11th. Four investment analysts have rated the stock with a Buy rating, one has assigned a Hold rating and two have assigned a Sell rating to the stock. According to MarketBeat.com, the company presently has a consensus rating of “Hold” and an average target price of $35.60.

Applied Optoelectronics Stock Performance

The stock has a 50 day moving average of $28.80 and a 200 day moving average of $26.39. The company has a quick ratio of 1.63, a current ratio of 2.31 and a debt-to-equity ratio of 0.23. The firm has a market cap of $2.75 billion, a price-to-earnings ratio of -12.53 and a beta of 3.26.

Applied Optoelectronics (NASDAQ:AAOI) last announced its quarterly earnings data on Thursday, November 6th. The semiconductor company reported ($0.09) earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of ($0.10) by $0.01. The firm had revenue of $118.63 million for the quarter, compared to the consensus estimate of $119.77 million. Applied Optoelectronics had a negative net margin of 36.97% and a negative return on equity of 7.34%. The business’s revenue for the quarter was up 82.1% on a year-over-year basis. During the same period in the prior year, the company posted ($0.21) earnings per share. Applied Optoelectronics has set its Q4 2025 guidance at -0.130–0.040 EPS. As a group, analysts anticipate that Applied Optoelectronics, Inc. will post -1.18 EPS for the current fiscal year.

Institutional Investors Weigh In On Applied Optoelectronics

Several institutional investors and hedge funds have recently added to or reduced their stakes in the business. Nisa Investment Advisors LLC boosted its holdings in shares of Applied Optoelectronics by 497.5% in the 2nd quarter. Nisa Investment Advisors LLC now owns 962 shares of the semiconductor company’s stock valued at $25,000 after purchasing an additional 801 shares in the last quarter. Comerica Bank bought a new stake in shares of Applied Optoelectronics during the 3rd quarter worth $28,000. GAMMA Investing LLC boosted its stake in Applied Optoelectronics by 85.9% in the second quarter. GAMMA Investing LLC now owns 1,785 shares of the semiconductor company’s stock valued at $46,000 after buying an additional 825 shares in the last quarter. Pinpoint Asset Management Singapore Pte. Ltd. acquired a new stake in Applied Optoelectronics in the second quarter valued at about $49,000. Finally, CWM LLC grew its position in Applied Optoelectronics by 175.5% in the second quarter. CWM LLC now owns 2,218 shares of the semiconductor company’s stock valued at $57,000 after acquiring an additional 1,413 shares during the last quarter. 61.70% of the stock is currently owned by institutional investors.

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.