NEW YORK, January 3, 2026, 10:48 ET — Market closed.
- Applied Optoelectronics shares rose 13.6% on Friday to close at $39.60.
- Optical networking peers Lumentum, Ciena and Coherent also finished higher.
- Traders are watching key technical levels near $40 ahead of the next session.
Shares of Applied Optoelectronics Inc (AAOI) closed up 13.6% at $39.60 on Friday, kicking off 2026 with a sharp move for the optical components maker. The stock traded between $35.76 and $40.10 and logged about 4.85 million shares in volume.
The move matters because AAOI has become a high-volatility proxy for demand tied to faster links inside cloud data centers — a trade that can move quickly when risk appetite shifts. The stock is also within reach of its 52-week high of $41.96 after a year that has seen a wide trading range.
AAOI’s gain came on a day when broader U.S. stocks were steadier to start the new year. The S&P 500 rose 0.2% and the Nasdaq composite was roughly flat, while the Dow climbed 0.7%, according to market data. 1
Optical networking shares were broadly higher. Lumentum Holdings, a supplier of optical components used in high-speed networks, closed up about 4.7% on Friday. 2
Ciena, which sells networking gear to telecom and data-center customers, gained about 5.2%, while Coherent rose about 5.3%. 3
Investors have kept a close eye on Applied Optoelectronics since it flagged stronger demand for next-generation data-center optics in December. “We are pleased to receive our first volume order for our 800G products from this major hyperscale customer,” CEO Thompson Lin said in a Dec. 10 statement; 800G refers to 800-gigabit-per-second optical transceiver modules, while a hyperscaler is a large cloud operator that runs massive data centers. The company said the 800G order could contribute $4 million to $8 million to fourth-quarter revenue if shipments meet year-end expectations, and that the same customer had placed nearly $22 million of 400G transceiver orders year-to-date. 4
Short interest has also been a feature of the name, a setup that can amplify moves when the stock runs. Shares short totaled 12.71 million as of Dec. 15 — about 19% of the public float — according to Yahoo Finance statistics.
On Wall Street, targets have moved up as the stock has rallied. A compilation published by Nasdaq on Dec. 21 pegged the average one-year price target at $38.08, based on multiple analyst estimates. 5
For investors, the next check is execution: whether AAOI can turn data-center demand into consistent volume shipments, while managing customer concentration and manufacturing scale-up for higher-speed products.
Before the next session, traders will watch whether AAOI can hold above the round $40 level after Friday’s push to $40.10. Support sits near the prior session’s low at $35.76, with a break back below that area risking a return toward the mid-$30s.
The next major company catalyst is earnings. Applied Optoelectronics is estimated to report results around Feb. 25, according to Nasdaq’s earnings calendar. 6
