Applied Optoelectronics' stock blasts off toward record gain on heavy volume, after upbeat earnings outlook and upgrade

Shares of Applied Optoelectronics Inc. (AAOI) zoomed 65.1% higher in very active midday trading Friday, to pace all gainers listed on the Nasdaq, after the maker of optical communications products provided an upbeat outlook for the current quarter. The stock was headed for the biggest one-day gain since it went public in August 2018, and the highest close since February 2021. Trading volume soared to 22.5 million shares, compared with a full-day average of about 3.6 million shares. The company had reported late Thursday an adjusted per-share loss that narrowed to 21 cents from a loss of 28 cents in the year-ago period, to beat the FactSet loss consensus of 28 cents. Revenue fell 20.4% to $41.6 million, below the FactSet consensus of $45.4 million. For the third quarter, the company said it expects an adjusted loss of 6 cents a share to earnings of 1 cent a share and revenue of $60 million to $66 million. That compares with the FactSet consensus at the end July for a per-share loss of 24 cents and revenue of $48.4 million. B. Riley analyst Dave Kang raised his rating on the stock to buy from neutral, and raised his price target to $11.50 from $2.50. The upbeat outlook comes less than two months after the company disclosed a supply agreement with Microsoft Corp. (MSFT)

-Tomi Kilgore

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08-04-23 1207ET

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