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

Applied Optoelectronics, Inc. (NASDAQ:AAOI) shares gapped down prior to trading on Thursday . The stock had previously closed at $45.23, but opened at $42.93. Applied Optoelectronics shares last traded at $37.92, with a volume of 4,126,937 shares trading hands.

Wall Street Analysts Forecast Growth

A number of research firms have recently issued reports on AAOI. Weiss Ratings reiterated a “sell (d-)” rating on shares of Applied Optoelectronics in a report on Wednesday, January 21st. Northland Securities set a $45.00 target price on Applied Optoelectronics in a research report on Thursday, December 11th. Rosenblatt Securities reiterated a “buy” rating and set a $50.00 price target on shares of Applied Optoelectronics in a research report on Friday, December 19th. B. Riley restated a “sell” rating and issued a $15.00 price objective on shares of Applied Optoelectronics in a report on Monday, November 10th. Finally, Needham & Company LLC upped their price objective on shares of Applied Optoelectronics from $38.00 to $43.00 and gave the company a “buy” rating in a research note on Thursday, December 11th. Four equities research analysts have rated the stock with a Buy rating, one has given a Hold rating and two have assigned a Sell rating to the company. Based on data from MarketBeat, the company has a consensus rating of “Hold” and an average target price of $35.60.

Applied Optoelectronics Trading Down 13.6%

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 company has a market capitalization of $2.67 billion, a PE ratio of -12.20 and a beta of 3.26. The stock’s fifty day moving average price is $32.89 and its two-hundred day moving average price is $29.06.

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

Insider Activity

In related news, CFO Stefan J. Murry sold 3,000 shares of Applied Optoelectronics stock in a transaction that occurred on Monday, January 12th. The stock was sold at an average price of $33.75, for a total transaction of $101,250.00. Following the sale, the chief financial officer directly owned 283,971 shares in the company, valued at $9,584,021.25. The trade was a 1.05% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which is available through this hyperlink. Also, insider David C. Kuo sold 12,500 shares of the stock in a transaction on Tuesday, December 23rd. The stock was sold at an average price of $40.15, for a total value of $501,875.00. Following the completion of the transaction, the insider owned 130,948 shares of the company’s stock, valued at approximately $5,257,562.20. This trade represents a 8.71% decrease in their position. The SEC filing for this sale provides additional information. Insiders have sold 16,500 shares of company stock worth $638,126 in the last quarter. 4.50% of the stock is owned by corporate insiders.

Institutional Trading of Applied Optoelectronics

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