Applied Optoelectronics (AAOI) experienced a remarkable 128.6% surge in share value over the past month, significantly outpacing the 5.5% decline in the Zacks Electronics – Semiconductors industry. This price increase follows the company’s better-than-expected fourth-quarter 2025 results, where it reported a non-GAAP loss per share of just $0.01, exceeding the consensus estimate of a loss of $0.12, and a revenue total of $134.3 million, marking a 34% year-over-year increase.
In the fourth quarter, AAOI’s data center segment brought in $74.9 million in revenue, reflecting a substantial 69% increase year-over-year. The company is gearing up for increased production of its 800G optical transceivers, expecting this segment to drive growth beginning in the second quarter of 2026. However, rising operating expenses, which reached $49.3 million in Q4, and tariffs costing approximately $4.3 million in Q4 alone, pose challenges to future profitability.
As of the end of 2025, AAOI’s monthly production capacity for 800G units stands at 90,000, with plans to expand this to over 500,000 by the end of 2026. The company’s overall revenue estimates indicate potential growth of 107.6% in 2026 and 90.1% in 2027, despite facing stiff competition in the optical networking market.
