Applied Optoelectronics, Inc. (AAOI) stock — is it a good business?

Applied Optoelectronics, Inc. (AAOI) stock — is it a good business? — InspectStocks

Just reported

Q3 2026 results

From Applied Optoelectronics's results release of November 5, 2026; its quarterly report has since been filed.

Revenue
Actual
$269.9M
+127% y/y
+41% q/q
Guided
$272.5M
midpoint
Within guide-1.0%
EPS, GAAP
Actual
$0.07
Guided
—
No guide given
Operating income, GAAP
Actual
-$1.4M
Guided
—
No guide given

Company outlook

Q4 2026

Revenue$385M – $420M+200% y/y First given

Set against the company's own guidance and the same quarter a year earlier, not analysts' estimates, which we do not hold. Adjusted figures are the company's own non-GAAP measures, as stated in the release.

How it makes money

Data-center products, including optical transceivers55%
CATV products and equipment43%
Telecom products2%

Shares of revenue are estimates for six months ended June 30, 2026, not figures from a filing.

Competes with

COHRCoherent Corporation
D
Size
$45.7B
Margin
12.2%
300502Eoptolink Technology Inc., Ltd.
6088Foxconn Interconnect Technology Ltd.
300308InnoLight Technology (Suzhou) Ltd.
INTCIntel Corporation
B
Size
$325.3B
Margin
-20.1%
LITELumentum Holdings Inc.
A
Size
$56.6B
Margin
-175.8%

What it sells6

Laser chips and laser devices
Light-producing semiconductor parts used in the company’s communications products; the company manufactures its laser chips in Sugar Land, Texas.
Optical components and laser subassemblies
Parts that house or combine lasers and other optical elements, and may include controls to manage the light signal.
Optical transceivers
Modules that transmit and receive data as light over fiber-optic cables, including in data centers, telecom networks, and FTTH networks.

Show 3 more

CATV transmitters
Equipment used at the cable network’s headend to send signals into the network.
CATV nodes and amplifiers
Network equipment that routes or boosts signals in cable television systems, including the coaxial-cable portion of a network.
Quantum Bandwidth-branded CATV equipment
The company’s branded cable-network equipment, sold directly to some cable network operators.

Who buys it5

Hyperscale data-center operators, including Microsoft, buy optical transceivers directly or through equipment suppliers.
Equipment suppliers serving data-center operators buy transceivers and other optical products for systems they provide to their customers.
Cable television equipment makers buy components, modules, and network equipment; the company also sells some Quantum Bandwidth-branded equipment directly to cable network operators.

Show 2 more

Telecom equipment makers and other transceiver manufacturers buy lasers, subassemblies, and transceivers for communications networks.
For the six months ended June 30, 2026, Digicomm accounted for 42.8% of revenue (high confidence); the company identifies it as a key CATV customer.

What it stands on, and what could break it

What the business leans on

1Revenue is concentrated among a small number of customers: the top ten customers accounted for 99% of revenue (six months ended June 30, 2026, high confidence). Digicomm accounted for 42.8% of revenue (same period, high confidence) and 67.2% of accounts receivable (June 30, 2026, high confidence).
2The company makes its laser chips only at its Sugar Land, Texas facility, so production of those chips depends on that site.
3Manufacturing takes place in the United States, Taiwan, and China, and the company depends on a limited number of outside suppliers for some materials and components.

What could go wrong

1A loss of, or a reduction in orders from, a key customer could affect revenue; sales are concentrated and customer orders are generally not covered by long-term purchase commitments.
2The company is expanding manufacturing capacity and spending on equipment and facilities while demand and customer delivery schedules can change; production problems or lower demand could leave capacity underused and affect results.
3Trade-policy changes, tariffs, export controls, or supply interruptions could raise costs or disrupt manufacturing and sales across the company’s operations in the United States, Taiwan, and China.

Full financial statements →

About Applied Optoelectronics, Inc.

Applied Optoelectronics designs and manufactures lasers, optical components, transceivers, and network equipment. Its products help data centers and communications networks send information over fiber-optic cables; it also makes equipment for cable television (CATV) networks and fiber to the home (FTTH). It sells to data-center operators, equipment makers, and network operators, either directly or through sales partners.

Head office: Sugar Land, Texas
Founded: 1997 (year incorporated, high confidence)
Employees: 4,691 (December 31, 2025, high)
Listed on: Nasdaq Global Market
Financial year ends: December 31

Built from Applied Optoelectronics, Inc.’s own filings with the U.S. Securities and Exchange Commission (SEC). Figures are as reported, with per-share history restated onto today’s share basis. This describes a business — it is not investment advice and not a recommendation to buy or sell anything.

Just reported

Q3 2026 results

From Applied Optoelectronics's results release of November 5, 2026; its quarterly report has since been filed.

Revenue
Actual
$269.9M
+127% y/y
+41% q/q
Guided
$272.5M
midpoint
Within guide-1.0%
EPS, GAAP
Actual
$0.07
Guided
—
No guide given
Operating income, GAAP
Actual
-$1.4M
Guided
—
No guide given

Company outlook

Q4 2026

Revenue$385M – $420M+200% y/y First given

Keep exploring

The themes Applied Optoelectronics is part of, the highest-graded companies in its industry, and the companies in its sector whose grade rose recently.

The theme it is part of

Highest-graded in Communication Equipment

Graded A or B and worth $2B or more: A first, then the largest.

Grade rose recently in Technology

Rose to A or B on a filing in the last 90 days, worth $2B or more: largest first.

How it makes money

Data-center products, including optical transceivers55%
CATV products and equipment43%
Telecom products2%

Shares of revenue are estimates for six months ended June 30, 2026, not figures from a filing.

Competes with

COHRCoherent Corporation
D
Size
$45.7B
Margin
12.2%
300502Eoptolink Technology Inc., Ltd.
6088Foxconn Interconnect Technology Ltd.
300308InnoLight Technology (Suzhou) Ltd.
INTCIntel Corporation
B
Size
$325.3B
Margin
-20.1%
LITELumentum Holdings Inc.
A
Size
$56.6B
Margin
-175.8%

What it sells6

Laser chips and laser devices
Light-producing semiconductor parts used in the company’s communications products; the company manufactures its laser chips in Sugar Land, Texas.
Optical components and laser subassemblies
Parts that house or combine lasers and other optical elements, and may include controls to manage the light signal.
Optical transceivers
Modules that transmit and receive data as light over fiber-optic cables, including in data centers, telecom networks, and FTTH networks.

Show 3 more

CATV transmitters
Equipment used at the cable network’s headend to send signals into the network.
CATV nodes and amplifiers
Network equipment that routes or boosts signals in cable television systems, including the coaxial-cable portion of a network.
Quantum Bandwidth-branded CATV equipment
The company’s branded cable-network equipment, sold directly to some cable network operators.

Who buys it5

Hyperscale data-center operators, including Microsoft, buy optical transceivers directly or through equipment suppliers.
Equipment suppliers serving data-center operators buy transceivers and other optical products for systems they provide to their customers.
Cable television equipment makers buy components, modules, and network equipment; the company also sells some Quantum Bandwidth-branded equipment directly to cable network operators.

Show 2 more

Telecom equipment makers and other transceiver manufacturers buy lasers, subassemblies, and transceivers for communications networks.
For the six months ended June 30, 2026, Digicomm accounted for 42.8% of revenue (high confidence); the company identifies it as a key CATV customer.

What it stands on, and what could break it

What the business leans on

1Revenue is concentrated among a small number of customers: the top ten customers accounted for 99% of revenue (six months ended June 30, 2026, high confidence). Digicomm accounted for 42.8% of revenue (same period, high confidence) and 67.2% of accounts receivable (June 30, 2026, high confidence).
2The company makes its laser chips only at its Sugar Land, Texas facility, so production of those chips depends on that site.
3Manufacturing takes place in the United States, Taiwan, and China, and the company depends on a limited number of outside suppliers for some materials and components.

What could go wrong

1A loss of, or a reduction in orders from, a key customer could affect revenue; sales are concentrated and customer orders are generally not covered by long-term purchase commitments.
2The company is expanding manufacturing capacity and spending on equipment and facilities while demand and customer delivery schedules can change; production problems or lower demand could leave capacity underused and affect results.
3Trade-policy changes, tariffs, export controls, or supply interruptions could raise costs or disrupt manufacturing and sales across the company’s operations in the United States, Taiwan, and China.

Full financial statements →

About Applied Optoelectronics, Inc.

Head office: Sugar Land, Texas
Founded: 1997 (year incorporated, high confidence)
Employees: 4,691 (December 31, 2025, high)
Listed on: Nasdaq Global Market
Financial year ends: December 31

Q3 2026 results

Revenue

EPS, GAAP

Operating income, GAAP

Company outlook

How it makes money

Competes with

What it sells6

Who buys it5

What it stands on, and what could break it

What the business leans on

What could go wrong

About Applied Optoelectronics, Inc.

Q3 2026 results

Revenue

EPS, GAAP

Operating income, GAAP

Company outlook

Keep exploring

The theme it is part of

Highest-graded in Communication Equipment

Grade rose recently in Technology

How it makes money

Competes with

What it sells6

Who buys it5

What it stands on, and what could break it

What the business leans on

What could go wrong

About Applied Optoelectronics, Inc.

Keep exploring

The theme it is part of

Highest-graded in Communication Equipment

Grade rose recently in Technology

AI networking & optics

Applied Optoelectronics, Inc.

Growth & cash — 2 of 5

Business trend

Share price and grade over time

Q3 2026 results

Revenue

EPS, GAAP

Operating income, GAAP

Company outlook

How it makes money

Competes with

What it sells6

Who buys it5

What it stands on, and what could break it

What the business leans on

What could go wrong

About Applied Optoelectronics, Inc.

Q3 2026 results

Revenue

EPS, GAAP

Operating income, GAAP

Company outlook

Keep exploring

The theme it is part of

Highest-graded in Communication Equipment

Grade rose recently in Technology

How it makes money

Competes with

What it sells6

Who buys it5

What it stands on, and what could break it

What the business leans on

What could go wrong

About Applied Optoelectronics, Inc.

Keep exploring

The theme it is part of

Highest-graded in Communication Equipment

Grade rose recently in Technology

AI networking & optics

Applied Optoelectronics, Inc.

Past performance

Growth & cash — 2 of 5

Business trend

Share price and grade over time