AAOI Stock Surges on Strong Revenue and Growth Outlook
Applied Optoelectronics (NASDAQ: AAOI) surged over 13% in Monday trading after reporting strong Q1 revenue of $151.14 million, a 51.4% year-over-year increase driven by robust datacenter demand for its 800G transceivers. The company completed its first volume shipment to a major hyperscale customer and guided toward higher sequential growth in the second half of 2026. Management expects full-year revenue exceeding $1 billion, more than doubling from 2025's total, with significant Q3 acceleration as new production capacity comes online. AAOI is also expanding its U.S.-based manufacturing footprint and maintaining a strong balance sheet to fund growth without dilution or debt. Despite concerns over margin compression due to rising R&D costs and datacenter mix shifts, the company’s gross profit still expanded by 43.78%. Analysts remain optimistic with an average price target of $150.30 and a strong buy consensus.