Key Highlights

  • Applied Optoelectronics shares are up 13.27% in pre-market trading, near $140.71, after closing Wednesday at $124.22
  • Q2 2026 revenue reached $191.9 million, up 86% year over year, marking a fifth consecutive record quarter
  • Non-GAAP EPS of $0.06 beat the $0.03 estimate
  • Data center revenue, now 56% of total revenue, grew 140% year over year
  • The company reiterated full-year 2026 revenue guidance of approximately $1.1 billion

What Happened

Applied Optoelectronics (NASDAQ:AAOI) shares are up 13.27% in pre-market trading, near $140.71, after closing Wednesday at $124.22, rebounding sharply after the stock initially slid in after-hours trading following Thursday's report. Applied Optoelectronics is a vertically integrated designer and manufacturer of fiber-optic networking products, serving the internet data center, cable television, telecommunications, and fiber-to-the-home markets, headquartered in Sugar Land, Texas.

Q2 2026 revenue reached $191.9 million, up 86% year over year and up 27% sequentially, marking a fifth consecutive record quarter and coming in line with guidance. Non-GAAP EPS of $0.06 beat the $0.03 estimate, driven by strong data center revenue, now 56% of total revenue, growing 140% year over year, and record CATV revenue of $80.0 million, up 43.8% year over year.

Capacity Expansion Continues

The company reiterated full-year 2026 revenue guidance of approximately $1.1 billion, citing demand for AI infrastructure products that continues to outpace production capacity through mid-2027. Manufacturing capacity is expanding from roughly 200,000 units per month currently to over 650,000 units per month by year-end 2026.

Applied Optoelectronics continues expanding U.S. manufacturing capacity across its Texas facilities, aiming to become the largest domestic optical transceiver producer, with raised full-year CapEx guidance of $565 million to $593 million, funded through cash on hand, an at-the-market equity program, and additional debt.

Conclusion

Applied Optoelectronics' 13.27% pre-market rebound reflects renewed investor confidence in the company's data center growth trajectory, even as broader questions around near-term supply and product transition timing remain in focus.

This article is for informational purposes only and does not constitute financial or investment advice. Readers should conduct their own research or consult a financial professional before making investment decisions.