Assessing Applied Optoelectronics (AAOI) Valuation After Major 800G Transceiver Order And AI Data Center Momentum

Simply Wall St.01-31

Applied Optoelectronics (AAOI) has been in focus after securing a significant 800G transceiver order from a major hyperscale customer, along with positive commentary on its AI-focused laser products ...

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At the same time, the 1 year total...","collect":0,"end_time":0,"defaultTopTitle":"simplywall.st","property":[],"viewcount":null,"language":"en","relate_stocks":{"BK4585":"ETF&股票定投概念","BK4528":"SaaS概念","AAOI":"Applied Optoelectronics Inc.","BK4023":"应用软件","IE0031619046.USD":"LEGG MASON ROYCE US SMALL CAP OPPORTUNITY \"A\" (USD) INC","BK4588":"碎股","BK6051":"信息科技咨询与其它服务","IE00B19Z4B17.USD":"LEGG MASON ROYCE US SMALL CAP OPPORTUNITY \"A\" (USD) ACC","BK4543":"AI","IE00B7SZL793.SGD":"Legg Mason Royce - US Small Cap Opportunity A Acc SGD-H","LYY.SI":"中云集团","BK4551":"寇图资本持仓","BK4020":"通信设备","BK4587":"ChatGPT概念","IE00B66KJ199.SGD":"LEGG MASON ROYCE US SMALL CAP OPPORTUNITY  \" A\" (SGD) ACC"},"translate_title":"在800G收发器大订单和人工智能数据中心势头之后评估应用光电(AAOI)的估值","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"LYY.SI":1.5,"AAOI":1.5},"content_text":"Applied Optoelectronics (AAOI) has been in focus after securing a significant 800G transceiver order from a major hyperscale customer, along with positive commentary on its AI-focused laser products and the launch of a new high-powered pump laser. See our latest analysis for Applied Optoelectronics. Those AI centric product wins sit against a backdrop of sharp moves in the shares, with a 22.09% 7 day share price return and a 25.10% 30 day share price return. At the same time, the 1 year total shareholder return of 56.20% and very large 3 year total shareholder return suggest longer term momentum has already been strong and recent news has kept interest elevated. If the AI data center story around Applied Optoelectronics has caught your attention, this could be a useful moment to scan other high growth tech and AI stocks that are attracting fresh interest from the market. With AAOI trading at US$43.61, above the US$36.60 analyst price target and still loss making on US$421.712m of revenue, is this AI optics story undervalued, or is the market already pricing in years of growth? AdvertisementMost Popular Narrative: 19.2% Overvalued Analysts following Applied Optoelectronics see fair value around $36.60, which sits below the recent $43.61 close and frames a more cautious narrative.  Ongoing expansion and ramp up of domestic (U.S.) and Taiwan based manufacturing for advanced transceivers, with capacity expected to increase more than 8x by year end and major customers requiring U.S. based production, provides a competitive edge and reduces tariff/supply chain risks, supporting higher future revenue visibility and potential margin stability.  Read the complete narrative. Curious what kind of revenue trajectory and profit margin shift would justify that fair value, and the higher future earnings multiple behind it? The narrative leans on aggressive top line expansion, a turn from losses to profits, and a richer earnings valuation than today. The exact mix of those ingredients is what drives the $36.60 figure. Result: Fair Value of $36.60 (OVERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, that story can quickly change if the heavy capital spending and customer concentration do not translate into the revenue scale and margin shift that analysts are banking on. Find out about the key risks to this Applied Optoelectronics narrative.  Build Your Own Applied Optoelectronics Narrative If you prefer to challenge this view and lean on your own reading of the data, you can shape a custom narrative in just a few minutes: Do it your way. A great starting point for your Applied Optoelectronics research is our analysis highlighting 1 key reward and 2 important warning signs that could impact your investment decision. Looking for more investment ideas? If AAOI is on your radar, this is a great moment to widen the net and line up a few other focused ideas to compare side by side.  Spot potential value by checking out these 868 undervalued stocks based on cash flows that the market may be pricing cautiously despite their cash flow profiles. Ride the AI wave with these 25 AI penny stocks that are catching attention for their exposure to artificial intelligence themes. Expand your watchlist into digital assets through these 18 cryptocurrency and blockchain stocks that tie traditional equities to cryptocurrency and blockchain trends.   This article by Simply Wall St is general in nature. We provide commentary based on historical data\n    and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your\n    financial situation. We aim to bring you long-term focused analysis driven by fundamental data.\n    Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.\n    Simply Wall St has no position in any stocks mentioned.New: Manage All Your Stock Portfolios in One PlaceWe've created the ultimate portfolio companion for stock investors, and it's free.• Connect an unlimited number of Portfolios and see your total in one currency• Be alerted to new Warning Signs or Risks via email or mobile• Track the Fair Value of your stocksTry a Demo Portfolio for FreeHave feedback on this article? Concerned about the content? Get in touch with us directly. 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