AAOI Stock On Track To Hit All-Time Highs After 40% Rally This Month – What’s Driving This Momentum?

• Earlier this month, the company secured a $71 million order for data center transceivers.
• Since mid-March, total orders from a hyperscale customer have totalled $124 million, more than double the company’s existing backlog.
• Applied Optoelectronics recently mentioned that it expects to record a monthly output of over 500,000 units of 800G and 1.6T transceivers by the end of the year.

Shares of Applied Optoelectronics Inc. (AAOI) jumped more than 10% in pre-market trading on Wednesday, putting the stock on track to hit record highs, as a string of major data center order wins fueled a sharp rally.

AAOI shares have already climbed nearly 40% in April and are now on track to notch a fifth consecutive session of gains, underscoring strong bullish momentum.

Order Momentum Drives Rally

Earlier this month, Applied Optoelectronics, a maker of optical networking products, secured a $71 million order for 800G single-mode data center transceivers from an unnamed hyperscale customer. This followed a separate order of more than $53 million from the same customer on March 23.

The transceivers will be used to expand network capacity as data center operators scale infrastructure to support increasingly demanding AI workloads. Applied Electronics expects shipments to begin in the second quarter of 2026, with completion targeted by mid-third quarter.

Since mid-March, total orders from this customer have reached $124 million, more than double the company’s existing backlog from the same client, according to the company.

Prior to that, Applied Optoelectronics received its first volume order for 1.6T data center transceivers from a long-standing hyperscale customer, though the order value was not mentioned.

The firm recently said that, with the expansion of its Taiwan facility and construction underway at its new site in Sugar Land, Texas, it expects to soon have the largest U.S. production capacity for 800G and 1.6T transceivers. Including both domestic and overseas operations, it anticipates reaching a combined monthly output of over 500,000 units by the end of the year.

How Did Retail Traders React?

Retail sentiment on Stocktwits turned ‘neutral’ from ‘bearish’ a day earlier, amid ‘high’ message volumes.

One user expects the stock to climb to $200. It is currently trading at around $130.

However, another user flagged concerns about the stock’s valuation. The stock has a forward price-to-earnings ratio of 144.3, according to Koyfin data. 

The company reported a net loss in each of its last eight quarters, according to Koyfin. Of the six analysts covering the stock, three have a ‘Buy’ rating, and three have a ‘Hold ' rating.’ 

Year-to-date, the stock has gained more than 220%.

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