NEW YORK, July 2, 2026, 17:04 (EDT)
- Applied Optoelectronics dropped 12.99% to finish at $120.95 after a volatile session.
- A filing on July 1 lists the Houston FAB4 cleanroom deal at $94.1 million.
- The deal is around 20% of the company’s cash and restricted cash as of the end of March.
- Nasdaq will be shut on Friday, July 3, for the Independence Day holiday.
Applied Optoelectronics, Inc. NASDAQ:AAOI shares dropped Thursday. The move followed a fresh filing detailing a $94.1 million spend for a Houston cleanroom, with substantial completion scheduled by Jan. 10, 2027.
AAOI finished the session at $120.95, dropping $18.05, or nearly 13%, WSJ/FactSet showed. Roughly 15.94 million shares changed hands, about a quarter more than the 65-day average. Shares traded between $113.4109 and $139.2703, a spread of $25.86 or about 21% of the closing price. The stock closed 48% under its 52-week high of $233.67 set May 13.
The drop outpaced the selloff in other optical and chip-linked names.
| Security | Google Finance ticker | Latest/close | Day move |
|---|---|---|---|
| Applied Optoelectronics | NASDAQ:AAOI | $120.95 | fell 12.99% |
| Coherent Corp. | NYSE:COHR | $333.36 | down 9.61% |
| Lumentum Holdings Inc. | NASDAQ:LITE | $728.32 | dropped 9.09% |
| Ciena Corp. | NYSE:CIEN | $422.46 | lost 8.68% |
| iShares Semiconductor ETF | NASDAQ:SOXX | $566.32 | slipped 5.52% |
| Invesco QQQ Trust | NASDAQ:QQQ | $712.60 | off 1.70% |
Quote data shows Coherent, Lumentum, Ciena, SOXX and QQQ all down today. AAOI dropped the most in the group.
AAOI is spending cash. The company said in an 8-K it signed a design-build deal with LCC3 Solution Inc. for its OMD 3, or FAB4, cleanroom at 11555 North Spectrum Blvd. in Houston. The work includes 195,591 square feet of ISO Class 6 cleanroom, 36,500 square feet of office, and 73,780 square feet for shipping, receiving, testing and inventory. The contract includes design, engineering, procurement, construction, testing, and commissioning.
| Filed item | Number | Investor read-through |
|---|---|---|
| FAB4 contract amount | $94.1 million | Fresh spending figure |
| Total project area | 305,871 sq ft | Works out to $308 per sq ft |
| Cleanroom area | 195,591 sq ft | $481 per sq ft for cleanroom |
| Q1 revenue | $151.1 million | Contract is 62.3% of Q1 sales |
| Q2 revenue guide midpoint | $189.0 million | 49.8% of midpoint |
| March 31 cash + restricted cash | $449.4 million | Contract uses 20.9% of cash |
| Completed ATM net proceeds | About $490 million | That’s 19.2% of ATM take |
That’s important because AAOI now operates with a far bigger balance sheet than last year. Cash and restricted cash totaled $449.4 million at March 31, boosted by an at-the-market offering. The company wrapped up that ATM on April 2 after selling roughly 4.8 million shares at a $103.51 weighted average, raising about $490 million in net proceeds.
The stock ended the session 16.9% over that ATM average price. The July 1 filing is a double-edged sword—it links new equity funding to U.S. manufacturing plans, but it also sets a timeline for a firm that last posted a GAAP net loss of $14.3 million for Q1.
Management hasn’t hidden why it’s spending. CEO Dr. Thompson Lin said in April that optical connectivity demand from data centers had “exceeded our expectations.” He also said the Houston-area site might handle as much as 700,000 units a month of 800G and 1.6T transceivers. By the end of 2027, laser fabrication capacity is set to jump “around 350%.” Applied Optoelectronics, Inc.
In May, CFO Dr. Stefan Murry said AAOI posted its fourth straight quarter of record revenue. The company closed Q1 with around 100,000 units per month of 800G transceiver output. For Q2, the company forecast revenue of $180 million to $198 million and a non-GAAP gross margin between 29% and 30%.
Customer concentration sticks out less, but it’s big. AAOI said accounts receivable at March-end was $299.0 million, and $222.7 million of that is owed by Digicomm International Inc. Its top 10 customers made up 98% of Q1 revenue. The plant is viable only if those big buyers keep up orders and cash conversion gets better.
Analysts were divided. WSJ/FactSet put the consensus at overweight. Three had buy ratings, one was overweight and four called it a hold. Price targets ranged from $57.50 to $260, with the median at $185.
U.S. markets are closed Friday, with no regular session. Nasdaq also marks July 3, 2026, as a holiday for Independence Day.
