Applied Optoelectronics Stock (AAOI) Soars as a Major Purchase Order Triggers a Price Target Increase

Applied Optoelectronics (AAOI) stock rallied on Tuesday after the fiber-optic networking products maker received updated analyst coverage. Five-star Rosenblatt Securities analyst Michael Genovese reiterated a Buy rating for AAOI stock and raised his price target to $140 from $125, representing a potential 13.09% upside for the shares.

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Genovese’s bullish coverage of Applied Optoelectronics came after the company announced the first volume order for its 1.6T data center transceivers. The order came from a long-time hyperscaler customer of the company with a focus on artificial intelligence (AI). With this order, the customer will be able to expand the bandwidth available for its AI applications.

Dr. Thompson Lin, Founder, Chairman, and CEO of Applied Optoelectronics, said, “We are seeing a clear progression toward higher-speed optics as AI clusters scale, and our transceiver portfolio enables our customers to order both 400G and 800G or 1.6T from us. With expansion at our Taiwan facility ongoing and construction underway at our new facility in Sugar Land, Texas, we expect that we will soon have the largest production capacity for 800G and 1.6T transceivers in the U.S., and including both our U.S. and overseas production, we continue to expect to be able to produce over 500,000 units of combined 800G and 1.6T transceviers per month by the end of this year.”

Applied Optoelectronics Stock Movement Today

Applied Optoelectronics stock was up 12.84% on Tuesday, expanding on a 258.06% rally year-to-date. The shares have also gained 634.04% over the past 12 months.

With today’s news came heavy trading of AAOI stock, as more than 8 million shares changed hands. For perspective, the company’s three-month daily average trading volume is about 7.71 million shares.

Is Applied Optoelectronics Stock a Buy, Sell, or Hold?

Turning to Wall Street, the analysts’ consensus rating for Applied Optoelectronics is Moderate Buy, based on two Buy and two Hold ratings over the past three months. With that comes an average AAOI stock price target of $82.25, representing a potential 34.34% downside for the shares.

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