New York, Jan 28, 2026, 13:01 (EST) — Regular session
- Applied Optoelectronics shares jumped roughly 18%, hitting $44.05 in midday trading
- Oxford Instruments announced it will provide plasma etch and deposition systems to AOI’s facility in Sugar Land, Texas
- Investors are focused on today’s Fed decision, looking for its impact on rate-sensitive tech stocks
Applied Optoelectronics Inc shares surged nearly 18% on Wednesday following Oxford Instruments’ announcement that it secured a plasma equipment supply deal linked to the U.S. optical components firm’s expansion in Texas. By 12:45 p.m. EST, the stock had climbed roughly 17.8% to $44.05, hitting a session high of $44.25. (SEMI)
This announcement hits differently because investors see anything connected to AI data-center expansions as a high-voltage trigger. For small-to-midcap suppliers, fresh capacity plans often send shares jolting more than any spreadsheet forecast could.
Oxford Instruments announced it will provide several etch and deposition “cluster” systems to Applied Optoelectronics’ facility in Sugar Land, Texas. The move supports AOI’s push to scale up indium phosphide production for optoelectronic devices. Fred Chang, an AOI executive, said the expansion targets “demand for our optical transceivers in AI data centers,” noting the new tools could boost quality and cut costs. Emiel Thijssen from Oxford Instruments called AOI “a valued long-term partner.” (Semiconductor Today)
The rally pushed AAOI past several competitors today. Viavi Solutions climbed around 3.0%, Lumentum Holdings rose close to 2.9%, and Coherent eked out a 0.9% gain. Fabrinet, however, dipped about 1.4%.
A regulatory filing earlier this week revealed that AOI’s CFO, Stefan J. Murry, handed over 7,150 shares on Jan. 22 to cover tax withholding related to vested restricted stock units, opting not to sell them on the open market. The Form 4 was signed and submitted on Jan. 26. (Sec)
Etch and deposition are the chipmaking steps often described as “cut” and “coat”: etch removes material from the wafer, while deposition deposits ultra-thin layers. Indium phosphide, a compound semiconductor, finds use in lasers and high-speed optical components—a niche gaining traction as data centers race toward faster connections.
Applied Optoelectronics develops and markets fiber-optic networking gear, such as optical modules and lasers, for broadband and data-center applications. (Seeking Alpha)
The broader market lent support as well. Chip-related shares held steady Wednesday, with Wall Street gearing up for big tech earnings and the Federal Reserve’s policy decision. (Reuters)
But there’s the usual caveat. Equipment supply agreements don’t guarantee immediate revenue, and installation plus qualification can take time—especially when manufacturers adopt new wafer sizes or automation processes. A slowdown in AI-related spending would quickly challenge the bullish outlook.
Turning to macro, the Fed’s statement drops at 2 p.m. EST, with Chair Jerome Powell speaking at 2:30 p.m. This slot often rattles high-growth tech stocks, even when no rate change is anticipated. (Federal Reserve)
