The shares of the applied optoelectronics have increased by 178% in the last year, but still decreased by 50% of their annual peak.
Production in America and Taiwan helps the company avoid most risks to tariffs.
The dilution of the shares has increased sharply, but the price of the shares has also increased (and has decreased and has increased again).
10 shares we like better than the attached optoelectronics ›
I know, I know. Applied optoelectronics(Nosdaq: aoei) It’s not right in landfills. As of August 15, 2025, it has accumulated 178% in the last 52 weeks.
But the applied optoelectronics won the price won the difficult and honest way: by selling highly efficient optical network products in several hungry targets. And despite the impressive one -year return, the shares dropped by 50% of the perennial maximums in December.
Therefore, I think you should consider buying an applied stock option in this strange combination of elevating profits and gloomy immersions.
In the recent second quarter report, Applied Optoelectronics has noted fantastic growth in its two largest divisions. With the artificial intelligence market (AI), which leads to a strong demand for the faster network modules on a network, sales of the data center increased by 30% compared to a year to $ 44.8 million. Cable TV (CATV) sales rose from $ 5.8 million to $ 56.0 million, as unnamed mega client invested in optical network infrastructure.
These results include the first delivery of the company from transcendors to the data center 400-gigabit to a technological giant who has not purchased applied optoelectronics products for several years. Looking forward, several large customers are tested by the still-unlawful 800-gigabit products. Shipments must start before the end of 2025, the exact period depending on the factory superstructures and customer qualification tests.
Applied Optoelectronics also has enough international manufacturing scale to avoid the greater part of the cost of tariffs. Its laser chips have been made in America for years, and next -generation transcers will be made in Texas and Taiwan. The most expensive tariff categories are almost no problem, according to the commentary on the profits from the financial officer Stefan Murray:
In our 800g and 1.6T acceptable -structures, less than 10% of the value of the components used is currently supplied by China and we have a path, as we scale production to further reduce this content of China, ultimately to almost zero. We are also discussing several key suppliers regarding the advancement of their US production to support a healthy internal supply chain.
Image source: Getty Images.
In addition to AI and CATV networks, the applied optoelectronics also makes laser -based sensors and chips for a network controller. This is an exciting NEXUS company in many promising growth markets.
Considering, this is not a flawless story of success. I can see two problems preventing you from buying applied supplies from optoelectronics.
The company’s financial results are a little jumping as much of the revenue generation comes from very large orders from a handful of key customers. This is an offender of the investor deal who prefer a predictable business with smooth revenue streams. However, the uneven path must calm down over time, as the applied optoelectronics expands its client list.
The applied optoelectronics is in the habit of printing new shares, largely in support of its stock -based compensation program. The number of shares has increased by a huge 125% in the last three years. But this dilution happened during an impressive return on stock. It is difficult to complain about severe dilution when the price of the shares is still increased by 1.340% higher.
There will be surprises on the road and not all will be pleasant. I am still impressed with the disciplined innovation of the applied optlectronics and market leaders on the market. His focus on US production must also be useful in this era of international trade tensions.
The AI boom is here to stay, and high -speed networks are not coming out of style soon. If you can focus on the growth of the business of the applied optoelectronics and overcome these potential shortcomings, I think the shares should serve you well over the next few years.
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Anders Bylund has no position in any of the reserves mentioned. Motley Fool has no position in any of the reserves mentioned. Motley Fool has a policy of disclosure.
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