Wang & Lee Group board approves 250-to-1 reverse share split
Investing.com - Rosenblatt raised its price target on Applied Optoelectronics (NASDAQ:AAOI) stock to $34.00 from $30.00 on Thursday, while maintaining a Buy rating on the optical networking company. The stock, currently trading at $26.23 with a market capitalization of $1.47 billion, has shown remarkable momentum with a 32.68% gain in the past week alone, according to InvestingPro data.
The price target increase represents a 22.5x multiple on the company’s projected 2026 earnings per share, reflecting Rosenblatt’s optimistic view on Applied Optoelectronics’ longer-term prospects. InvestingPro analysis indicates the stock is currently trading above its Fair Value, with analyst targets ranging from $13 to $50.
Rosenblatt expressed bullishness about the company’s 2026 outlook, specifically noting potential for better-than-consensus gross and operating margins, though it acknowledged uncertainty about whether third-quarter 2025 revenue guidance would reach the consensus estimate of $120 million.
The research firm cited limited volumes in 400G and 800G products during the third quarter of 2025 as a potential constraint on near-term revenue guidance.
Rosenblatt described Applied Optoelectronics as "a very attractive stock for 2026" and predicted the share price would rise by the end of 2025, with strength likely continuing into 2026, suggesting investors would quickly look past any potential third-quarter 2025 revenue shortfall.
In other recent news, Applied Optoelectronics reported its first-quarter 2025 earnings, showing a mixed financial performance. The company posted a non-GAAP net loss of $0.02 per share, which was better than the anticipated $0.04 loss, while revenue slightly exceeded forecasts at $99.9 million. This revenue marked a year-over-year doubling, reflecting strong demand in the CATV and data center markets. Despite these results, the stock experienced a decline in after-hours trading, signaling investor concerns about future growth. Additionally, Applied Optoelectronics completed its first volume shipment of high-speed data center transceivers to a major hyperscale data center customer, marking the first significant quantity shipment in several years. This development is part of the company’s ongoing U.S.-based capacity expansion plan. Analysts from firms like Raymond (NSE:RYMD) James and Northland Capital Markets have shown interest in the company’s inventory management and production capabilities, particularly concerning the 800G transceivers. The company anticipates a positive non-GAAP net income for the full year, driven by increased production and demand for its high-speed transceivers.
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