Applied Optoelectronics stock | 2026 earnings growth & current analysis

Applied Optoelectron...

NasdaqGM:AAOI

$ 34,04

+ $1,03 (3,12%)

34,04 $

+$1,03 (3,12%)

End-of-day quote: 01/09/2026

Applied Optoelectronics Stock Value

Analysts currently rate NasdaqGM:AAOI as Outperform.

Outperform

Applied Optoelectronics Company Info

EPS Growth 5Y

1,68%

Market Cap

$2,32 B

Long-Term Debt

$0,14 B

Short Interest

2,55%

Annual earnings

02/27/2026

Dividend

$0,00

Dividend Yield

0,00%

Founded

1997

Industry

Information Technology

Country

United States

ISIN Number

US03823U1025

Website

http://www.ao-inc.com

Analyst Price Target

$43,00

26.32%

Last Update: 01/10/2026

Analysts: 5

Highest Price Target $50,00

Average Price Target $43,00

Lowest Price Target $15,00

In the last five quarters, Applied Optoelectronics’s Price Target has risen from $11,87 to $28,33 - a 138,67% increase. Five analysts predict that Applied Optoelectronics’s share price will increase in the coming year, reaching $43,00. This would represent an increase of 26,32%.

Top growth stocks in the information technology sector (5Y.)

What does Applied Optoelectronics do?

Applied Optoelectronics, Inc. (AOI) provides fiber-optic networking products, primarily for four networking end-markets: internet data center, cable television (CATV), telecommunications, (telecom), and fiber-to-the-home (FTTH). The company designs and manufactures a range of optical communications products at varying levels of integration, from components, subassemblies, and modules to complete turn-key equipment. In designing products for its customers, it typically begins with the fundamenta...

The company designs and manufactures a range of optical communications products at varying levels of integration, from components, subassemblies, and modules to complete turn-key equipment. In designing products for its customers, it typically begins with the fundamental building blocks of lasers and laser components. From these foundational products, the company designs and manufactures a wide range of products to meet its customers’ needs and specifications, and such products differ from each other by their end market, intended use, and level of integration. The company primarily focuses on the higher-performance segments within all four of its target markets, which increasingly demand faster connectivity and innovation.

The four end markets the company targets are all driven by significant bandwidth demand fueled by the growth of network-connected devices, video traffic, cloud computing and online social networking.

The internet data center market is the company's largest and fastest-growing market. The company's customers in this market are generally large internet-based (hyperscale) data center operators, along with equipment suppliers who supply its products along with others to its hyperscale data center operator customers. In both cases, the company supplies optical transceivers that plug into switches and servers within the data center and allow these network devices to send and receive data over fiber optic cables. The majority of the data center optical transceivers that the company sells utilize its own lasers and subassemblies (refers to the transceiver subassemblies as light engines).

The CATV market is its second largest and most established market, for which the company supplies a broad array of products, including lasers, transmitters, transceivers, and turn-key equipment. Sales of headend, node, and distribution equipment, including amplifiers, have contributed significantly to the company's revenue in recent years as a result of its ability to meet the needs of CATV equipment vendors who have continued to outsource both the design and manufacturing of this equipment. In 2023, the company began offering many of its CATV products directly to MSO customers, under the newly created Quantum Bandwidth brand name.

In the telecom market the company supplies lasers and laser subassemblies, as well as transceivers. The company's customers in this segment consist mostly of network equipment manufacturers (NEMs) and other manufacturers of optical transceivers. The company's NEM customers manufacture equipment used in telecommunications networks and its transceiver manufacturer customers use its lasers and subassemblies in the manufacture of their optical transceivers. Most of the company's products in this segment are purchased for use in advanced 5G mobile network deployments.

The company's vertically integrated manufacturing model provides it several advantages, including rapid product development, fast response times to customer requests, and greater control over product quality and manufacturing costs. The company designs, manufactures, and integrates its own analog and digital lasers using proprietary Molecular Beam Epitaxy (MBE) and Metal Organic Chemical Vapor Deposition (MOCVD), alternative processes for the fabrication of lasers. The company manufactures the majority of the laser chips and optical components that are used in its products. The lasers the company manufactures are tested extensively to enable reliable operation over time, and its devices are often highly tolerant of changes in temperature and humidity, making them well-suited to the Cable TV Broadband (CATV), FTTH, and 5G markets where networking equipment is often installed outdoors. All of the company's laser chips are manufactured in its facility in Sugar Land, Texas.

Solutions

The company leverages its extensive expertise in high-speed optical, mixed-signal semiconductor, and mechanical engineering, and MOCVD, and its proprietary MBE laser fabrication process, to deliver technologically advanced products to its customers.

The company designs and sells products at the level of integration desired by a customer, from components to turn-key equipment, providing its customers a dependable simplified supply chain.

As a vertically integrated supplier, the company is able to monitor and maintain quality control throughout the production process, using its internally produced components, where possible, for its final products. With manufacturing facilities in the U.S., Taiwan, and China, the company can support high volume production and timely delivery for its customers around the world.

Strategy

The company seeks to be the leading global provider of optical components, modules, and equipment for each of its four target markets: internet data centers, CATV, telecom, and FTTH.

The company's strategy is to continue to penetrate the internet data center market; extend its leadership in CATV networking; continue to invest in the company’s capabilities, especially its automated module production, and infrastructure; selectively pursue other opportunities that leverage its existing expertise; and pursue complementary acquisition and strategic alliance opportunities.

Products

The company's products include an array of optical communications solutions at varying levels of integration. The company commonly begins from the fundamental building blocks of lasers and laser components. From these foundational products, the company designs and manufactures a wide range of products, from optical modules to complete turn-key equipment. The company designs its products to target customers in its identified markets to meet their needs and specifications.

The company's components often incorporate one or more of its optical laser chips inside a precision housing that provides mechanical protection, as well as standardized electrical contacts. More complex optical components may also include optical filters (for example, for use in WDM) or other optical elements by which optical signals are routed internally within the component. These more advanced components may also include coolers, heaters, and sensors that allow the temperature of the laser chip to be measured and controlled. The company manufactures the majority of the laser chips and optical components that are used in its own products.

At the next level of integration, the company's module or sub-assembly products typically contain one or more of its optical components and some additional control circuitry. Examples of modules include the company's transceiver line, primarily used in internet data center markets, telecom markets, and FTTH markets.

At the highest level of integration and complexity, the company's equipment products typically contain one or more optical components, modules, and additional electronic control circuitry required to enable these subsystems to operate independently. For example, the company's CATV transmitter equipment requires the utilization of its optical components and assembly onto a circuit board and to an external housing. Examples of equipment include the company's CATV transmitter and CATV nodes.

Intellectual Property

Patents

As of December 31, 2024, the company owned a total of 188 U.S. issued patents, 137 patents issued in China and Taiwan, and 10 patents issued in Europe, plus a number of pending U.S. and foreign/international patent applications. The company's issued U.S. and foreign patents will expire between 2025 and 2044.

The company's portfolio of patents and patent applications covers several different technology families including laser structure and design; optical signal conditioning and laser control; laser fabrication; photodiode and optical receiver design and fabrication; optical device and module designs; optical device packaging equipment and techniques; optical network enhancements; and CATV networking technologies.

Trademarks

The company has registered the trademarks APPLIED OPTOELECTRONICS, INC., AOI, and Quantum Bandwidth with the U.S. Patent and Trademark Office on the Principal Register.

Operations

The company sells its products to customers worldwide, and in addition to these external customer sales, many of its products are used internally in the production of transceivers and equipment that it manufactures. With a vertically integrated manufacturing process, the company produces many of its own laser chips and other parts required to manufacture its optical components. Through this model, the company is able to reduce development time and product costs, as well as actively monitor and control product quality. The company incorporates its own components into its transceivers, subsystems, and equipment products wherever possible.

Customers

The company's customers are primarily internet data center operators, CATV, telecom equipment manufacturers, and internet service providers. The company's sales channel partners provide logistical services and day-to-day customer support. Where the company sells through an indirect sales channel, it works with the end customer to establish technological specifications for its products. The company's equipment customers typically offer its equipment under their brand name, and its equipment is often customized with unique design or performance criteria by each of these customers. The company also, from time to time, offers design or manufacturing services to customers to assist them in more effectively using its products and realizing time-to-market advantages.

In 2024, the three customers who contributed most to the company's internet data center revenue were Microsoft, Oracle, and a U.S.-based manufacturer. In 2024, the company's largest CATV customer was Digicomm. In 2024, revenue from the internet data center market, CATV market, telecom market, FTTH market, and other markets provided 59.5%, 35.2%, 4.4%, 0.0%, and 0.9% of the company's revenue, respectively.

In its telecom market, the company manufactures and sells optical products, which include transceivers designed to transmit signals used in 5th Generation (5G) mobile networks, and various products targeted at the metro-scale telecom networking market. The company has various other products designed for diverse applications, both inside and outside of communications technology, which generally are derivatives of products developed for its four target markets.

The company supports its sales efforts by attending industry trade shows (virtually and in person), technical conferences, and other promotional efforts. These efforts are aimed at attracting new customers and enhancing the company's existing customer relationships.

Competition

The company's major competitors in one or more of its markets include Coherent Corporation, Foxconn Interconnect Technology Ltd., InnoLight Technology (Suzhou) Ltd., Intel Corporation, Lumentum Holdings, Inc., Mitsubishi, Molex, LLC, Source Photonics, Inc., and Sumitomo Electric Industries, Ltd.

Seasonality

The company is uncertain whether the demand for its internet data center, CATV, telecom, and FTTH products is seasonal, as its sales data does not indicate a significant trend with respect to these products. The company began to manufacture a quantity of CATV and internet data center products in its Ningbo, China factory in 2017 and 2020, respectively. This factory experiences a lengthy shut-down associated with the Lunar New Year holiday, which occurs in Q1 of each year (year ended December 2024).

Governmental Regulations

The company is subject to rules promulgated by the Securities and Exchange Commission pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act regarding the use of 'conflict minerals'.

The company's environmental management systems in its facilities in Sugar Land, Texas, Ningbo, China and Taipei, Taiwan are all certified to meet the requirements of ISO14001:2015.

The company's operations and many of its products are subject to various federal, state, local, and foreign regulations that have been adopted with respect to the environment, such as the Directive on the Restriction of the Use of Certain Hazardous Substances in Electrical and Electronic Equipment; Registration, Evaluation, Authorization, and Restriction of Chemicals; and Substances of Concern In Products, regulations adopted by the European Union, or EU.

The company's products are primarily classified under Export Control Classification Numbers (ECCN) 5A991, 6A995, and EAR99. Export Control Classification requirements are dependent upon an item's technical characteristics, the destination, the end-use, the end-user, and the activities of the end-user. Should the ECCN change, then the export of the company's products to certain countries would be restricted.

History

Applied Optoelectronics, Inc. was founded in 1997. The company was incorporated in 1997.

Applied Optoelectronics Questions and Answers

Which sectors generate sales and which are the top 3 markets?

Revenue distribution by industry: Data centers: approx. 60% Telecommunications: approx. 25% Cable TV: approx. 10% Other: approx. 5% TOP 3 markets and their percentage shares: USA: approx. 50% China: approx. 30% Europe: approx. 15% Applied Optoelectronics, Inc. generates the majority of its reven...

At which locations are the company’s products manufactured?

Production Sites: Sugar Land, Texas, USA Ningbo, China Taipei, Taiwan Applied Optoelectronics, Inc. mainly produces its products at three sites. The headquarters and a significant portion of production are located in Sugar Land, Texas, USA. Additionally, the company has production facilities in Ni...

What strategy does Applied Optoelectronics pursue for future growth?

Revenue Growth: Estimated at 10-12% annually (2026 based on historical data and market trends) Focus on New Technologies: Expansion of product range in the field of optical network solutions Applied Optoelectronics, Inc. pursues a growth strategy that heavily relies on innovation and technological a...

Which raw materials are imported and from which countries?

Main raw materials: Gallium arsenide, Indium phosphide, Silicon Countries of origin: China, Taiwan, Japan, USA Applied Optoelectronics, Inc. is a company specializing in the production of optoelectronic components. The main raw materials they use include gallium arsenide and indium phosphide, which...

How strong is the company’s competitive advantage?

Market Share: Estimated 5-7% in the field of optical network solutions (2026) Research & Development: Investments of approximately 15% of revenue (2025) Technology Patents: Over 200 active patents (2025) Applied Optoelectronics, Inc. has a moderate competitive advantage in the field of optical n...

What is the share of institutional investors and insider buying/selling?

Institutional Investor Ownership: 65% (estimated, 2026) Insider Trades: No significant transactions in the last quarter (estimated, 2026) The institutional investor ownership in Applied Optoelectronics, Inc. is approximately 65%. This demonstrates a strong confidence from institutional investors in...

What percentage market share does Applied Optoelectronics have?

Market share of Applied Optoelectronics, Inc.: 3% (estimated, 2026) Top competitors and their market shares: Lumentum Holdings Inc.: 18% II-VI Incorporated (now Coherent Corp.): 15% Finisar Corporation (part of II-VI): 12% Fujitsu Optical Components Ltd.: 10% Sumitomo Electric Industries, Ltd.: 8%...

Is Applied Optoelectronics stock currently a good investment?

Revenue Growth: 8.5% (2025) R&D Expenses: 12% of revenue (2025) Market Share in Optical Networking Technology: 5% (2025) Applied Optoelectronics, Inc. recorded a revenue growth of 8.5% in 2025, attributed to increasing demand for optical networking solutions. The company is heavily investing in...

Does Applied Optoelectronics pay a dividend – and how reliable is the payout?

Dividend payment: No dividend (as of 2023) Applied Optoelectronics, Inc. has not paid any dividends to its shareholders in recent years. Instead, the company focuses on reinvesting its profits in research and development, as well as expanding its production capacity. The reliability of a dividend pa...

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Applied Optoelectronics Stock Value

Applied Optoelectronics Company Info

Analyst Price Target

Top growth stocks in the information technology sector (5Y.)

What does Applied Optoelectronics do?

Applied Optoelectronics Questions and Answers

Offer & Services

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