Applied Optoelectronics, Inc. (AAOI), a Texas-based manufacturer of fiber-optic networking products, is experiencing significant growth in its AI data center segment, driven by demand from major tech companies. AAOI reported high double-digit revenue growth, with expectations for triple-digit growth in earnings per share (EPS) and revenue by 2026 and 2027, according to Zacks Consensus Analyst Estimates.
In a significant move, AAOI has secured a multi-year deal with Amazon.com, Inc. (AMZN), in which Amazon will invest up to 8 million shares in exchange for advanced access to optical transceivers. This partnership enhances revenue visibility for AAOI, which has nearly doubled its profit margins since 2023. Furthermore, as Western nations aim to minimize reliance on Chinese suppliers, AAOI’s domestic manufacturing capability positions it favorably in the market.
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