Post-earnings recap
Reported
Thu, Aug 6, 2026
EPS actual
$0.06
EPS est.
$-0.02
EPS surprise
+360.87%
1-day move
-3.38%
Applied Optoelectronics reported strong earnings with a notable EPS beat, but the stock fell 3.38% after the announcement. The company achieved record revenue driven by a surge in 800G product sales, although growth is being limited by production capacity issues. Looking ahead, management expects substantial revenue growth in Q3, but investors may be cautious due to the capacity constraints mentioned.
| Metric | Actual | Expected | Surprise |
|---|---|---|---|
| EPS | $0.06 | N/A | +360.87% |
| Revenue | $191.9 million | N/A | N/A |
| YoY Revenue Growth | 86% | N/A | N/A |
| QoQ Revenue Growth | 27% | N/A | N/A |
| Q3 Revenue Projection | $255 million - $290 million | N/A | N/A |
Management expressed cautious optimism about the company's performance, highlighting significant revenue growth and a return to profitability. They acknowledged production capacity constraints but are planning to ramp up capacity significantly by 2027.
AOI returned to non-GAAP profitability with an EPS of $0.06, exceeding guidance.
800G product revenue increased more than tenfold YoY, contributing significantly to growth.
Production capacity constraints are limiting growth despite strong demand.
Applied Optoelectronics, Inc. (AAOI) operates in the Information Technology sector, focusing on communications equipment. The company plays a crucial role in providing optical networking products, which are essential for high-speed internet and data transmission, particularly as demand for broadband services continues to grow.
Last quarter
In Q1 2026, AAOI reported an EPS of -$0.07, outperforming analyst expectations by 32%. However, the stock fell 11.76% the following day, indicating market disappointment despite the surprise.
EPS beat streak
4Q
EPS beat rate
88%
Avg EPS surprise
+82.27%
Avg 1-day reaction
-1.29%
Investors are cautiously optimistic ahead of the earnings report, given the company's history of beating EPS estimates. However, concerns remain about revenue performance and market conditions.
Bull case
If AAOI continues its trend of beating EPS estimates and shows strong revenue growth, it could signal a turnaround in investor sentiment and lead to a significant stock price increase.
Bear case
Conversely, if the company fails to meet expectations or shows declining revenue, it could reinforce negative market sentiment and lead to further stock price declines.
The print will turn on these.
Q1
What is the expected revenue growth rate for the upcoming quarter?
Revenue growth is critical for assessing the company's market position and ability to capitalize on demand for optical networking products.
Q2
How is the company managing its gross margins amid rising production costs?
Understanding gross margin management will provide insights into the company's operational efficiency and pricing power in a competitive market.
—
Est. EPS
$0.12
Est. Rev
$656M
Impl. Move
±21.3%
Why consensus could be wrong
The Street may underestimate the potential for AAOI to capitalize on increasing demand for high-speed internet, especially with new product launches.
Supporting evidence
The company's historical EPS beat rate of 88% suggests a strong track record of exceeding expectations.
Options pricing indicates a significant move, suggesting that the market is bracing for volatility, which may not align with consensus expectations.
Key risk
If revenue growth exceeds expectations, it could shift the narrative towards a more positive outlook.
Pre-commit to what would confirm each case.
The core thesis revolves around the company's ability to grow revenue and maintain healthy margins in a challenging market environment.
Bull confirmed if
Achieving revenue growth of 10% or more 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.
What the market is pricing for the move.
Implied Move
±56.52%
Historical Avg
±7.3%
The options market is pricing in a significant potential move in either direction, reflecting uncertainty about the upcoming earnings report.
Options are pricing ±56.5% while AAOI has averaged ±7.3% over the last 8 prints — setup is pricing rich.
ATM IV
1.3%
30d HV
138.9%
Open-market trades by officers, directors, and 10%+ holders over the trailing 90 days.
Bought
$0.00
0 sh
0 insiders
Sold
$720,180.00
6,000 sh
1 insider
Net
$720,180.00
Net selling
Most Active Insiders· 1 open-market trade
$720,180.00
Net selling
Smart-money positioning from the most recent 13F filings.
Institutional
63.35%
of float
Insider
9.78%
of float
Holders
631
institutions
Top Holders· as of Jun 2026
Blackrock Inc.
6,450,270 sh · $790.4M
7.63%
-10.3%
Likely market behavior by outcome. Not investment advice.
Beat & raise
If AAOI beats expectations and raises guidance, history suggests the stock could see an average one-day move of +0.21%, confirming a bullish outlook.
In line / cautious
An in-line report with cautious commentary may lead to muted stock movement, reflecting uncertainty in the market.
Miss
If the company misses expectations, history suggests a potential average one-day decline of -3.87%, reinforcing bearish sentiment.
The lines on the call that would change the story.
Recent Transactions
Oct 5, 2026 · @ $120.03
6,000 sh
$720,180.00
Open-market trades only (Form 4 codes P/S). Awards, exercises, and tax-withholding excluded as routine compensation noise.
Invesco Ltd.
3,414,262 sh · $418.4M
4.04%
69.5%
Vanguard Capital Management LLC
3,363,001 sh · $412.1M
3.98%
9.9%
Marex Group Ltd.
2,830,272 sh · $346.8M
3.35%
878.8%
Vanguard Portfolio Management LLC
2,651,718 sh · $324.9M
3.14%
47.2%
13F filings updated quarterly. Position deltas show change in shares vs. the prior quarter.