AAOI Stock Analysis: Buy, Sell, or Hold?

AAOI - Applied Optoelectronics, Inc.

SEMICONDUCTORS & RELATED DEVICES
$122.19
-9.22 (-7.02%) β–Ό
5d: -11.51%
30d: +2.46%
90d: -28.68%
WAIT
LOW Confidence
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Analysis Updated: Aug 19, 2026 12:00 AM ET
Earnings: Aug 06, 2026 0d
Smart Money Distribution

Options positioning is turning defensive after a sharp run-up - a pattern consistent with institutional profit-taking. View Scanner →

Signal fired Aug 7, 2026 at $135.63 · last confirmed Aug 19, 2026

Strength: 7.0/10

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Interactive Price Chart (1 Month)

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πŸ’‘
Bottom Line:
⏸️ WAIT FOR STABILIZATION: AAOI is down 11.5% over the last 5 days. While fundamentals may be solid, catching a falling knife is risky. Wait for price to stabilize before entering.
See Forward Earnings Fair Value & Price Prediction β†’

Long-Term Wealth Forecast (2031)

Based on Analyst Consensus Growth & Historical Valuation

0% (Stagnation) 50% (Hyper Growth)
EST. PRICE IN 2031
$224.04
Based on 14.5% avg growth
INTRINSIC VALUE TODAY
$139.11
12.2% Margin of Safety

How this is calculated: We use a Growth Decay Model: starting with analyst consensus growth (adjusted above) and gradually slowing it down to a long-term terminal rate (4%) by Year 5. This provides a more realistic valuation than assuming constant hyper-growth. We then apply a 25.0x Exit PE.

In-depth Analysis How we analyze

Valuation Analysis: AAOI is currently trading at $122.19, which is considered fair relative to its 30-day fair value range of $97.70 to $135.53. From a valuation perspective, the stock is trading at a discount (Forward PE: 26.6) compared to its historical average (38.7). Remarkably, the market is currently pricing in an annual earnings decline of 11.8% over the next few years. This aligns with recent fundamental challenges.

Technical Outlook: Technically, AAOI is in a uptrend. The price is currently testing key support at $118.88. A bounce from this level would confirm strength, while a break below could signal further downside. Short-term momentum is weak, with the stock down 7.0% recently.

Market Sentiment: The stock scores a mixed 40/100 on our bottoming-setup gauge, with only partial signs of a stabilized entry point. Wall Street analysts see significant upside, with an average price target of $163.40 (+33.7%). Current signals suggest waiting for a better entry point before initiating new positions.

Quick Decision Summary

Current Position FAIR
Historical Trading Range $97.70 - $135.53
Company Quality Score 47/100 (HOLD)
Volume Confirmation HIGH
Confidence Score 67.6%

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All Signals

  • NEUTRAL: Price in fair range
  • NEUTRAL: Mixed technical signals (40/100)
  • BULLISH: High volume confirmation
  • BEARISH: Downward momentum (-7.0%)
  • BULLISH: Trading 33.7% below Wall St target ($163.40)
  • WARNING: Composite score 47/100 in the bottom quintile β€” this cohort historically lags the market

Trading Range Analysis

30-Day Trading Range $97.70 - $135.53
Current vs Trading Range FAIR

Support & Resistance Levels

Support Level $118.88
Resistance Level $160.99
Current Trend Uptrend
Technical data as of Aug 19, 2026

Fundamental Context

Forward P/E (Next Year Est.) 26.55
Wall Street Target $163.40 (+33.7%)
Revenue Growth (YoY) 86.4%
Profit Margin -9.6%
Valuation Discount vs History -11.8% cheaper
PE vs Historical 26.6 vs 38.7 CHEAP
Market-Implied Price Targets If current PE multiple persists
Implied Growth (YoY): -11.8% (market-implied from PE analysis)
1-Year Target $109.97 (-10%)
2-Year Target $98.97 (-19%)
3-Year Target $89.08 (-27%)
3-Yr Target (if PE normalizes) (PE: 27β†’39) $129.83 (+6%)
3-Year Scenarios Using analyst projected EPS growth
Bull: (PE: 26.6, Growth: 576.8%) $412.39 (+238%)
Base: (SPY PE: 20.1, Growth: 576.8%) $311.72 (+155%)
Bear: (PE: 17.1, Growth: 576.8%) $264.96 (+117%)
πŸ’‘ Upside Surprise Potential
If earnings stabilize (0% growth), PE could expand from 26.6 to 38.7
Stabilization Target: $178.10 (+45.8%)
PE Expansion Potential: +45.8%
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Last updated: August 20, 2026 8:56 AM ET
Data refreshes hourly during market hours. Next update: 9:56 AM
πŸ”₯ Top Stocks Breaking Out Now
Ticker Score Recommendation Change %
Insider Activity (6 Months)
0
Buys
11
Sells
Net
INSIDERS SELLING
Recent Transactions
Stefan J Murry SELL 4000 shares 2026-04-10
David C Kuo SELL 29000 shares 2026-03-19
Hung-Lun (Fred) Chang SELL 36400 shares 2026-03-16

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