Start here if you're new
what it is
AAOI builds fiber-optic gear for 4 markets: data centers, CATV, telecom, and FTTH.
how it gets paid
Last year Applied Optoelectronics made $456M in revenue (GAAP $455.7M in the FY2025 release).
why it's growing
Revenue grew 82.8% last year on a GAAP basis. Q4 revenue was $134.3M vs. $100.3M a year earlier (~34% higher), and GAAP gross margin for the year was 30.0%.
what just happened
Q4 revenue was $134.3M; full-year GAAP EPS was -$0.64 per basic share.
At a glance
B balance sheet — gets the job done, barely
35/100 earnings predictability — expect surprises
-$0.64 fy2025 eps est
~$960M fy2026 rev est
negative operating margin (still scaling)
xvary composite: 55/100 — below average
What they do
AAOI builds fiber-optic gear for 4 markets: data centers, CATV, telecom, and FTTH.
You sell into 4 end-markets, not 1. That matters when one customer pauses. Optical transceivers sit inside switches and servers, and AAOI also manufactures key parts across Texas, Taiwan, and China, which keeps more of the stack under one roof.
How they make money
$456M
annual revenue · their business grew +82.8% last year
total revenue
$456M
+82.8%
The products that matter
fiber-optic transceivers for data centers
Data Center Transceivers
key growth line
official FY2025 results pointed to broad-based demand in the data center and CATV markets. If hyperscale bandwidth demand is real enough to justify the valuation, this is where you should see it show up first.
AI infrastructure
in-house laser chip fabrication
Laser Semiconductor Chips
vertical integration angle
AAOI makes these internally instead of outsourcing the whole stack. In plain English: if volumes rise, the company keeps more of the manufacturing economics. That matters because FY2025 GAAP gross margin was 30.0%.
margin lever
cable tv and telecom networking
CATV & Telecom Products
legacy revenue stream
This older line still matters because the whole company only generated $456M of revenue last year. When the base is that small, legacy demand still has the power to move the quarter even if the story investors care about lives in data centers.
legacy support
Key numbers
$456M
annual revenue
That is the whole top line. It grew 82.8% year over year; the business was still loss-making on a GAAP net basis for the year.
82.8%
vs. last year growth
Revenue rising 82.8% with a ~30% GAAP gross margin for FY2025 shows demand is ahead of full profitability.
30.0%
gross margin
FY2025 GAAP gross margin from the annual release. It is the buffer between growth and bottom-line losses.
loss
GAAP net (FY2025)
FY2025 GAAP net loss was $38.2M on $455.7M revenue—still investing through the growth ramp.
Financial health
B
strength
- balance sheet grade B — adequate — nothing special
- risk rank 2 — safer than 80% of stocks
- price stability 5 / 100
- long-term debt about $164M of debt and convertibles
B — functional but not a standout on the balance sheet.
Total return vs. market
Return history isn't available for AAOI right now.
source: institutional data · return history unavailable
What just happened
FY2025 reported
Q4 revenue was $134.3M; Q4 GAAP EPS was -$0.03 (FY GAAP EPS -$0.64).
Full-year GAAP revenue grew 83% to $455.7M, with FY GAAP gross margin at 30.0%. The year was still a GAAP net loss as AOI invests through the ramp.
$134.3M
Q4 revenue
-$0.64
FY GAAP EPS
30.0%
FY GAAP gross margin
the number that mattered
FY GAAP gross margin at 30.0% matters because revenue growth still has to convert into sustainable profit.
source: company earnings report, 2026
Get this snapshot in your inbox
This page, delivered free — plus weekly updates when the numbers change. plain english, no spam.
weekly updates
earnings alerts
plain english
no spam
What could go wrong
The main risk is simple: AAOI is priced for a very fast hyperscaler optics ramp before current profitability has caught up. If demand timing slips, or margins do not improve, the stock loses its favorite argument.
med
customer concentration cuts both ways
A $456M revenue base can change fast when a small number of large data center customers pull orders forward, delay them, or switch suppliers. When your business is this concentrated, a few purchase orders can rewrite the quarter.
A $456M revenue base can change fast when a small number of large data center customers pull orders forward, delay them, or switch suppliers. When your business is this concentrated, a few purchase orders can rewrite the quarter.
med
margin expansion is the real test
FY GAAP gross margin was 30.0% and full-year GAAP EPS was still -$0.64. If margins do not expand while volume rises, you get a company that grows without earning enough to justify a roughly $7B valuation.
FY GAAP gross margin was 30.0% and full-year GAAP EPS was still -$0.64. If margins do not expand while volume rises, you get a company that grows without earning enough to justify a roughly $7B valuation.
med
valuation leaves no room for ordinary execution
At roughly $7B market cap on ~$456M of revenue, the stock is priced for a leap, not a jog. Street revenue estimates for the out-years cluster nearer ~$1B than the old placeholder scale—so execution has to match that implied ramp.
At roughly $7B market cap on ~$456M of revenue, the stock is priced for a leap, not a jog. Street revenue estimates for the out-years cluster nearer ~$1B than the old placeholder scale—so execution has to match that implied ramp.
med
bigger rivals still have the loudest voice
Vertical integration helps, but Broadcom and Coherent still bring more scale and deeper customer relationships. If pricing gets tighter, smaller suppliers usually feel it first.
Vertical integration helps, but Broadcom and Coherent still bring more scale and deeper customer relationships. If pricing gets tighter, smaller suppliers usually feel it first.
The stock needs 4 markets to work together. If 1 slows, the other 3 have to carry the year.
source: institutional data · regulatory filings · risk analysis
Pay attention to
metric
~$1B FY2026 Street sales vs. ~$456M FY2025 actual
Consensus revenue for the next fiscal year is on the order of ~$1B (sources vary). That is a big step up from $455.7M GAAP revenue in FY2025—so each print is a scorecard against that ramp.
risk
gross margin holding near 30%
If margin does not improve as revenue scales, the story stays optical demand and never graduates into real earnings power.
trend
2.05 beta and 5 / 100 price stability
The stock can reprice before the fundamentals catch up. You should expect sharp moves in both directions, especially when expectations shift.
calendar
next earnings print and next 13F round
The next report tells you whether growth is converting into better economics. The next ownership filings tell you whether institutions are following the move or fading it.
Analyst rankings
earnings predictability
35 / 100
in human-speak, analysts do not see a stable earnings line yet. You should expect revisions and surprises.
risk rank
2
This score says the company itself is sturdier than the stock chart suggests. The business risk and the trading risk are not the same thing.
beta
2.05
Market sensitivity is high. If the tape gets weak, AAOI usually reacts more than most stocks.
source: institutional data
Institutional activity
institutional ownership data for AAOI is being compiled.
source: institutional data
Price targets
3-5 year target range
n/a
n/a
$111
current price
n/a
target midpoint · n/a from current
Want the deeper analysis?
The full deep dive: dcf model, scenario analysis, competitive moat breakdown, and quarterly tracking — everything on this page, taken further.
see plans from $5/moThe deep dive