New York, Jan 29, 2026, 05:37 EST — Premarket
- AAOI slips ahead of the open following a steep rally the previous session
- Bullish talk returns to the spotlight as heavy short positions draw renewed attention
- Options activity surged as an insider revealed plans to sell stock
Applied Optoelectronics shares dropped 0.6% to $44.95 in early trading Thursday, following a 21% surge on Wednesday that pushed the stock to $45.23. 1
The swings matter because AAOI has turned into a popular play on the data-center buildout, offering an alternative to the mega-cap giants. With heavy short interest and noisy options activity, even a minor headline can trigger outsized moves.
Early Thursday, a note from Zacks Investment Research reignited the optics angle, highlighting that laser transceivers enable data centers to transfer more data than traditional copper links. The report also pointed out that “roughly 18% of the float is short the stock.” 2
Options activity surged Wednesday, with roughly 20,975 call contracts traded — about four times the usual volume, according to GuruFocus. Implied volatility jumped to 116.66%, signaling traders expect a big move. This metric, based on option prices, gauges how much market swings are anticipated. 3
Separately, insider David Kuo filed a Form 144 on Wednesday, signaling his intention to offload 12,000 shares via Raymond James & Associates. The sale is pegged at roughly $540,671. Form 144 serves as a heads-up from insiders before they sell stock, typically linked to restricted shares now clearing for sale. 4
The AI story isn’t new. Back in December, the company announced its first volume order for 800-gigabit data-center transceivers from a “major hyperscale customer.” CEO Thompson Lin called it a milestone toward “high volume transceiver shipments” via automated production lines. CFO Stefan Murry added that the same customer is already ramping up 400G transceivers. 5
Wall Street remains divided on Applied Optoelectronics. The company reported an adjusted quarterly loss of 9 cents per share, with revenue hitting roughly $118.6 million—an 82.1% jump year-over-year, according to MarketBeat. It also forecasted fourth-quarter revenue between $125 million and $140 million. Analysts tracked by MarketBeat give the stock a “Hold” rating on average, with a consensus price target of $35.60. 6
The competitive landscape is well known — major optical suppliers target the same cloud and telecom supply chains — while smaller players risk margin pressure if customers cut orders or push more aggressively for dual-sourcing. That’s the environment they’re navigating.
The risk here is straightforward: momentum. If volume drops off or the short-covering demand fades, AAOI could quickly lose its gains. Insider selling plans only add pressure when the rally is already extended.
Traders are now focused on the company’s upcoming earnings report, scheduled by MarketBeat for Feb. 25 after the market closes. Changes in guidance, particularly about high-speed transceiver demand and margins, could steer sentiment following this week’s swings. 7
