Past performance does not predict future results. Informational only, not investment advice.
AAOI has bottomed, similar to the July 29th low. Author expects the stock to reach $200 by end of year, implying significant upside from current levels.
AI infrastructure play with strong demand tailwinds. After ATM close and current capex phase, H2 next year should deliver free cashflow given sold-out capacity and sector-wide supply constraints. Author expects $500+ within two years.
Chang Hung-Lun (Fred) (*** See Remarks at APPLIED OPTOELECTRONICS, INC.) reported an open-market sale of 32,172 shares of AAOI at an average $110.21, roughly $3,545,676, in a Form 4 filed 2026-09-10.
Author has accumulated ~1,300 shares of AAOI, averaging down from $119 to a blended cost basis around $107, betting on the optics/photonics build-out thesis. Position has recovered from -$30k paper loss to +$4k, suggesting conviction in eventual recovery and upside move.
AAOI is a small-cap opportunity for benefiting from the next phase of AI infrastructure growth, specifically in power/cooling and optical technologies. The author identifies it as an under-the-radar company with strong moats that could explode in value.
AAOI trades at a 9B marketcap while forecasted to generate 5.5B annualized revenue from transceivers within a year. Data centre optical connectivity is the critical AI bottleneck, positioning AAOI as the leading beneficiary of 800G/1.6T transceiver adoption.
AAOI is guiding for $471M monthly revenue ($5.5B annualized) with an $11B current market cap, implying significant upside even if execution falters. As photonics becomes the next AI bottleneck, AAOI offers the highest-beta play in the sector.
AAOI is a vertically integrated optical supplier positioned at a critical bottleneck in AI infrastructure—the optical interconnect layer between silicon and power. With hyperscalers spending $725B+ capex in 2026 and the optical transceiver market reaching $26B, AAOI's $1.1-$1.5B demand is supply-constrained rather than demand-constrained, suggesting significant room for revenue growth and margin expansion as production capacity scales.
After a 30% post-earnings drop, author bought 1% of portfolio believing the stock was oversold. The earnings report revealed fundamentals solid enough to justify a recovery from the depressed price.
Applied Optoelectronics manufactures optical interconnect components for data centers and AI infrastructure. The author sees optics and photonics as key bottlenecks with major upside potential.
End of results.