Information Technology·Communications Equipment·$12.6B
Applied Optoelectronics (AAOI) is a technology company that designs and manufactures advanced optical components for communications equipment. With a market cap of $12 billion, it plays a crucial role in the growing demand for high-speed internet and data transmission, especially as more businesses and consumers rely on cloud services and digital communication.
Revenue Growth
This metric will indicate how well AAOI is capturing market demand in the communications sector.
Gross Margin
Understanding the gross margin will help investors assess the company's profitability and cost management.
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EPS Beat Streak
2Q
EPS Beat Rate
88%
Avg EPS Surprise
+36.68%
Avg Stock Reaction
+0.84%
In the last quarter, AAOI reported an EPS of -$0.01, which was significantly better than the expected -$0.16, resulting in a positive surprise. However, the stock still dropped by 7.62% the following day, reflecting market skepticism.
Management Promises & Guidance
Overall, expectations for AAOI's upcoming earnings are mixed, with uncertainty surrounding revenue and profitability metrics. Investors are keen to see if the company can maintain its track record of beating EPS estimates.
Bull Case
If AAOI can demonstrate strong revenue growth and improved margins, it could signal a recovery in demand for its products, leading to a positive market reaction.
Bear Case
On the other hand, if the company fails to meet expectations or provides weak guidance, it could lead to further declines in stock price, especially given the recent history of disappointing results.
Revenue Growth
N/AThis metric will indicate how well AAOI is capturing market demand in the communications sector.
Gross Margin
N/AUnderstanding the gross margin will help investors assess the company's profitability and cost management.
EPS (Earnings Per Share)
N/AEPS is a key indicator of a company's profitability and will be closely watched by investors.
The print will turn on these two things.
Q1
What is the expected revenue growth rate for the upcoming quarter?
Revenue growth is crucial for assessing the company's ability to capitalize on market demand and will heavily influence investor sentiment.
Q2
How is the gross margin expected to trend in this quarter?
Gross margin trends will provide insights into cost management and pricing power, which are vital for long-term profitability.
Why consensus could be wrong
The Street may be underestimating the potential for AAOI to capture increased demand in the communications sector, especially as more companies invest in high-speed data infrastructure.
Supporting Evidence
AAOI has a strong track record of beating EPS estimates, with an 88% beat rate over the last eight quarters.
Options pricing suggests a significant move, indicating that traders are expecting volatility that may not be reflected in current consensus estimates.
Key Risk
If revenue growth exceeds expectations, it could challenge the current bearish sentiment and lead to a reevaluation of the stock's potential.
Pre-commit to what would confirm each case.
This quarter's performance is critical as it will determine whether AAOI can sustain its growth trajectory amidst competitive pressures.
Bull Confirmed If
A revenue growth rate of 15% or higher compared to the previous quarter would confirm the bull case.
Bear Confirmed If
A revenue decline or gross margin below 40% would confirm the bear case.
Implied Move
±68.61%
Historical Avg
±6.3%
The options market is pricing in a significant potential move, indicating that traders expect volatility around the earnings announcement.
Options are pricing ±68.6% while AAOI has averaged ±6.3% over the last 8 prints — setup is pricing rich.
Likely market behavior by outcome — not investment advice.
Beat & Raise
If AAOI beats expectations and raises guidance, history suggests a potential 1.51% increase in stock price on the following day, confirming bullish sentiment.
In-Line / Cautious
If results are in line with expectations but management offers cautious commentary, the stock may see muted movement as investors reassess future growth.
Miss
If AAOI misses earnings expectations, history suggests a potential decline of 3.87% in stock price, reflecting heightened investor concern.
AI-powered briefs, options data, and 20 quarters of history — everything you need before earnings.
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AI-powered briefs, options data, and 20 quarters of history — everything you need before earnings.
No charge today · Auto-bills $8/mo after 7 days · Cancel anytime
PARAMOUNT SKYDANCE C Class B
May 4, 2026