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Investing.com - Applied Optoelectronics (NASDAQ:AAOI) maintained its Buy rating and $32.00 price target at Needham following the company’s second-quarter 2025 financial results. According to InvestingPro data, analysts’ targets range from $15 to $50, with the stock currently trading at $22.33.
The optical networking company reported results slightly below consensus estimates, with revenue 3% below expectations and earnings per share missing by $0.09, primarily due to higher-than-anticipated operating expenses. Despite current challenges, InvestingPro analysis shows impressive revenue growth of 50.3% over the last twelve months, with analysts forecasting 89% growth for fiscal year 2025.
Applied Optoelectronics delivered strong performance in its Cable segment, which grew 860% year-over-year despite a 13% sequential decline, while the Data Center segment increased 30% year-over-year, achieving its highest revenue in seven quarters with broad strength across 100G, 200G, and 400G products.
Needham highlighted that investor focus remains on securing approvals for new 800G products, initially manufactured in Taiwan with production soon expanding to Texas facilities.
The research firm noted that with potential tariffs on the horizon, Applied Optoelectronics’ production investments could position it to become the largest onshore transceiver supplier in the industry at a time of surging demand, though execution risks remain high alongside strong geopolitical and economic incentives for U.S. cloud companies to shift market share to the firm.
In other recent news, Applied Optoelectronics reported its financial results for the second quarter of 2025, showing a larger-than-expected loss and a decline in revenue compared to forecasts. The company reported an earnings per share loss of $0.16, which was double the anticipated loss of $0.08. Revenue for the quarter totaled $103 million, falling short of the forecasted $106.16 million. These financial results have been a focal point for investors assessing the company’s current performance. The earnings report is considered a significant development, as it impacts investor expectations and market sentiment. No updates on mergers or acquisitions were reported. Additionally, there were no recent analyst upgrades or downgrades mentioned. These developments provide insight into the company’s financial health and operational challenges.
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