Applied Optoelectronics, Inc. (AAOI)
NASDAQInformation TechnologyCommunication EquipmentSnapshot 2026-09-04
$105.53+5.13%
Close 2026-09-04 · 1-day change
NASDAQInformation TechnologyCommunication EquipmentSnapshot 2026-09-04
QuarterlyIQ Insights · AAOI
How strong the business is — where it ranks within its sector on capital efficiency and cash generation, and how well management has been executing.
How this business ranks within information technology on a research-validated quality screen. As of 2026-09-04.
The screen ranks AAOI against its sector on four durable signals: share dilution, return on capital, free-cash-flow yield, and FCF margin. Historically the highest-quality names tended toward better typical outcomes and fewer bad years over multi-year holds (strongest at three years, modest at one), and that pattern showed up even before the price moved. It characterizes business quality, not price direction.
Each leg is a sector-relative percentile (higher is better); 4 of 4 legs were available for this name. The composite is built from these four; the raw value follows each percentile for context.
A forward quality tilt, not a price prediction, and context for your own research rather than a recommendation. Not investment advice.
How management runs the business: capital, margins, balance sheet, and how reliably they guide and deliver.
Each factor is a parallel diagnostic with a clear read of what it shows and how names like it have historically fared. Never aggregated into a single score.
Operating income rose in 1 of the last 3 quarter-over-quarter moves. Historically, Information Technology names rated weak grew net income 47% of the time over the next year (vs 59% for the rest of the cohort, n=6360).
Not investment advice. Scores describe historical and current data; they are not forecasts of future returns. Consult a licensed advisor before making investment decisions.
A guidance track record builds as the company issues and delivers on guidance.
Priorities management has stated in recent disclosures, with status and evidence drawn from earnings calls, filings, and press releases.
Expand manufacturing capacity to meet strong demand for 800G and 1.6Tb optical transceivers, targeting 650,000 units per month by year-end 2026.
Stated as a priority in 2 of last 2 quarters. Manufacturing capacity grew from nearly 100,000 units/month in 2026-Q1 to approaching 200,000 units/month in 2026-Q2. Management targets ramping capacity to around 650,000 units/month by year-end 2026. The trajectory shows delivering progress on capacity expansion.
“We have a total manufacturing capacity approaching 200,000 units per month and expect by year-end to produce around 650,000 pieces of 800G and 1.6 Tb products per month.”
“Exiting Q1 with total manufacturing capacity of nearly 100,000 units of 800G transceivers per month, expanding Houston footprint to increase capacity.”
Drive steady sequential revenue growth throughout 2026, supported by strong demand in datacenter and CATV markets.
Stated as a priority in 2 of last 2 quarters. Revenue increased from $151.1M in 2026-Q1 to $191.9M in 2026-Q2 (+27%). Guidance for 2026-Q3 projects revenue between $255M and $290M, indicating management is delivering sequential growth as committed.
“We delivered record revenue for our fifth consecutive quarter and forecast demand will continue to outpace production capacity through mid-2027.”
Achieve non-GAAP net income profitability starting in 2026-Q2 and continue improving non-GAAP earnings per share.
Stated as a priority in 2 of last 2 quarters. Non-GAAP net income improved from a loss of $4.9M in 2026-Q1 to a profit of $5.5M in 2026-Q2. Guidance for 2026-Q3 projects further non-GAAP net income growth to between $10.1M and $24.0M. Management is delivering on returning to profitability.
“We returned to non-GAAP profitability in the quarter with net income of $5.5 million, or $0.06 per diluted share.”
Sustain non-GAAP gross margin in the range of 29% to 30.5% through 2026 despite production ramp and cost pressures.
Stated as a priority in 2 of last 2 quarters. Non-GAAP gross margin was 29.2% in 2026-Q1 and improved slightly to 29.8% in 2026-Q2. Guidance for 2026-Q3 projects margin between 29% and 30.5%. Management is maintaining gross margin within the targeted range.
“Non-GAAP gross margin was 29.8% in Q2 2026, with guidance for 29% to 30.5% in Q3.”
Acquire and lease additional industrial buildings in Houston area to nearly double manufacturing footprint and support capacity ramp.
Newly stated in 2026-Q1. Management reported nearly doubling Houston-area manufacturing footprint via acquisitions and leases to support capacity ramp. No subsequent quarters restated this priority, so delivery trajectory is early stage.
“We have recently nearly doubled our Houston-area footprint through a combination of real estate acquisitions and leases to increase our capacity.”
Over the trailing year it converted 2.70x of net income into operating cash flow.
Most sensitive to the broad stock market.
Not enough signal to read sensitivity to the US dollar, long-term interest rates, Fed net liquidity, real (inflation-adjusted) rates (low R² over the window).
61 material management or governance events in the past 24 months, led by capital-allocation actions. Historically, Information Technology names rated volatile grew net income 60% of the time over the next year (vs 58% for the rest of the cohort, n=2769).
Not investment advice. As of 2026-09-04.
“We anticipate sequential revenue growth throughout this year, with significantly larger growth expected starting in Q3 as additional capacity comes online.”
“Non-GAAP net loss was $4.9 million, or $0.07 per basic share in Q1 2026.”
“Non-GAAP gross margin was 29.2% in Q1 2026, with guidance for 29% to 30% in Q2.”