- Applied Optoelectronics Rips 24%, Lumentum Jumps 17%, Coherent Rallies 13% as Optics Trade Catches Fire
May 11, 2026
Quick Read
Applied Optoelectronics (AAOI) stock surged on strong Q1 FY26 earnings indicating 51% YoY revenue growth driven by 800G transceiver demand for AI data centers. Lumentum (LITE) stock climbed as the company’s fiscal Q3 guidance projects 85%+ YoY growth, extending a historic rally in optical networking components. Coherent (COHR) stock rallied on datacenter segment strength, NVIDIA (NVDA) partnership expansion, and S&P 500 inclusion fueling AI capex momentum. The analyst who called NVIDIA in 2010 just named his top 10 stocks and Applied Optoelectronics wasn't one of them. Get them here FREE.
The optical-networking complex is ripping higher at midday Monday, with all three of the group's marquee names posting double-digit gains. Applied Optoelectronics (NASDAQ:AAOI) is leading the basket, up 24% to $184.51, while Lumentum (NASDAQ:LITE) trades 17% higher near $1,057. Coherent (NYSE:COHR) rounds out the trio, up 13% to roughly $377.60.
The rally is essentially a mirror image of last Thursday's sector-wide pullback, when AAOI, LITE, and COHR shares fell sharply in unison. Today's bid reflects renewed enthusiasm for AI data center capex and the optical connectivity layer that links hyperscale GPU clusters.
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Year to date, Applied Optoelectronics stock is up 420%, Lumentum shares are up 184%, and Coherent has gained 104%. Over the trailing year, those moves stretch to 1,136%, 1,516%, and 435%, respectively, for AAOI, LITE, and COHR stock.
Applied Optoelectronics Leads the Group
Applied Optoelectronics is the day's standout, with AAOI stock advancing from Friday's close of $148.94. The move follows the company's Q1 FY2026 report last week and a sharp drawdown in the same session.
Applied Optoelectronics posted Q1 FY26 revenue of $151.14 million, growing 51% year over year (YoY) on surging demand for 800G transceivers used in AI workloads. The data center segment more than doubled to $81.4 million, including Applied Optoelectronics' first volume shipment of 800G product to a large hyperscale customer.
Management guided Q2 revenue to $180 million to $198 million and signaled significantly larger sequential growth starting in Q3 as expanded Houston capacity comes online. Applied Optoelectronics CEO Thompson Lin pointed to "strong customer engagement around our 800G transceivers and 1.6 Tb products" as AI-driven data center investments accelerate.
Story Continues
Lumentum Extends Its Historic Run
Lumentum is climbing from Friday's close near $904, extending one of the most extreme rallies in the entire optical components space. The fiscal Q2 2026 report from February still anchors the LITE bull case.
Lumentum's fiscal Q2 revenue of $665.5 million grew 66% YoY, with non-GAAP EPS of $1.67 topping the $1.41 consensus. Fiscal Q3 FY2026 guidance calls for revenue of $780 million to $830 million, implying growth above 85% YoY.
Retail sentiment is leaning into the same narrative. One widely read r/StockMarket post argued that "Lumentum and Coherent are the only real ways to play that shift" as GPU clusters scale, drawing 81 comments and a Reddit sentiment score of 82 classified as very bullish.
Coherent Rounds Out the Rally
Coherent reported its fiscal Q3 FY2026 results last week, with revenue of $1.806 billion growing 21% YoY. Non-GAAP EPS of $1.41 marked Coherent's fourth consecutive earnings beat.
The company's Datacenter and Communications segment reached $1.36 billion, or 75% of revenue, growing 41%. Coherent's expanding partnership with NVIDIA, including a $2 billion investment from the chipmaker, anchors a roadmap that includes doubling internal indium phosphide output by year-end.
Coherent recently joined the S&P 500, and CEO Jim Anderson cited "exceptionally strong demand across our datacenter and communications businesses." Coherent's Q4 FY2026 guidance of $1.91 billion to $2.05 billion keeps the AI demand thesis on track for COHR stock.
What to Watch Next
Bearish chatter is part of the conversation, too. A counterpoint r/stocks post asked, "Is there any value left in the AI supply chain?", flagging that Coherent, Lumentum, and Ciena (NYSE:CIEN) shares are up 200-400% in 12 months with gross margins that don't justify the multiples. After parabolic gains, the bar for continued upside is elevated.
The optics complex has now shown it can swing in either direction by double digits within just a few sessions, with last Thursday's coordinated selloff and today's coordinated rip as bookends. Customer concentration with a handful of hyperscalers means any pause in AI capex could ripple through Applied Optoelectronics, Lumentum, and Coherent simultaneously.
Keep an eye on whether the group holds gains into the close, the next round of sell-side price target revisions, and hyperscaler capex commentary. AAOI's Q3 capacity ramp, Lumentum's next quarterly update, and Coherent's co-packaged optics and optical circuit switch revenue contribution through 2027 are the next real catalysts.
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- Applied Optoelectronics Stock Is Surging Monday: What's Driving The Action?
May 11, 2026 · benzinga.com
Applied Optoelectronics Inc (NASDAQ:AAOI) shares are trading sharply higher on Monday as traders lean back into high-momentum optical and AI-networking names, even after a recent bout of mixed guidance and choppy post-earnings moves. Here's what investors need to know.
- Applied Optoelectronics Rips 24%, Lumentum Jumps 17%, Coherent Rallies 13% as Optics Trade Catches Fire
May 11, 2026 · 247wallst.com
The optical-networking complex is ripping higher at midday Monday, with all three of the group's marquee names posting double-digit gains.
- Applied Optoelectronics, Inc. (AAOI) Q1 2026 Earnings Call Transcript
May 8, 2026 · seekingalpha.com
Applied Optoelectronics, Inc. (AAOI) Q1 2026 Earnings Call Transcript
- AAOI Q1 Loss Wider Than Expected on Higher Costs, Revenues Jump Y/Y
May 8, 2026
Applied Optoelectronics AAOI reported a non-GAAP loss of 7 cents per share for the first quarter of 2026, wider than the Zacks Consensus Estimate of a loss of 5 cents. The company reported a loss of 2 cents per share in the year-ago quarter and a loss of 1 cent in the previous quarter.
Revenues of $151.1 million rose 51.4% year over year but missed the consensus mark by 3.4%. On a sequential basis, revenues increased 12.5%.
Results reflected broad-based demand across datacenter and CATV products, with AAOI completing its first volume shipment of 800G transceivers to a large hyperscale customer during the quarter.
Applied Optoelectronics, Inc. Price, Consensus and EPS Surprise
Applied Optoelectronics, Inc. price-consensus-eps-surprise-chart | Applied Optoelectronics, Inc. Quote
AAOI Datacenter Demand Drives Record Revenue Run
Datacenter revenues reached $81.4 million, more than doubling from the year-ago quarter, as customer engagement strengthened around higher-speed optical products. The ramp helped offset a smaller telecom contribution and supported the company’s fourth consecutive quarter of record revenues.
CATV revenues were $66.8 million, modestly ahead of the prior-year period, underscoring steadier demand in the HFC networking business. On a year-over-year basis, CATV revenues increased 3.6%.
Telecom revenues came in at $2.6 million, while “Other” added $0.3 million, leaving the quarter’s mix more heavily weighted toward datacenter shipments.
Applied Optoelectronics Sees 800G Demand Stay Strong
AAOI highlighted accelerating AI-driven datacenter investment as a key demand driver and pointed to strong customer engagement around both 800G transceivers and emerging 1.6 Tb products. The company also said it anticipates sequential revenue growth through 2026, with significantly larger growth expected starting in the third quarter as additional capacity comes online.
On the supply side, Applied Optoelectronics exited the quarter with total manufacturing capacity of nearly 100,000 units of 800G transceivers per month across its U.S. and Taiwan locations. The company also said it has recently nearly doubled its Houston-area footprint through real estate acquisitions and leases to support additional capacity and future growth plans.
AAOI's Margins Suffer From Mix Shifts and Rise in Costs
In the first quarter of 2026, on a non-GAAP basis, gross margin was 29.2%, which contracted 150 basis points (bps) year over year and 220 bps on a sequential basis.
Adjusted EBITDA was positive at $1.0 million, indicating that operating leverage remains sensitive to manufacturing utilization and spending levels even as revenue scales.
Operating expenses increased year over year as the company supported product development and scaled its organization. GAAP research and development expense rose 44.1% year over year to $25.7 million, while sales and marketing expense increased 18.5% year over year to $6.3 million. General and administrative expense surged 52.6% year over year to $24.9 million, bringing total operating expenses to $56.9 million, which jumped 44.1% year over year.
GAAP operating loss was $13 million compared with a loss of $9 million reported in the year-ago quarter.
Story Continues
AAOI Strengthens Liquidity as Working Capital Builds
AAOI ended March with $449.4 million in cash, cash equivalents and restricted cash, up sharply from $216.0 million at the end of 2025.
Accounts receivable increased to $299 million and inventories rose to $206.2 million, consistent with higher shipment volumes and the demands of a capacity ramp.
Applied Optoelectronics Outlines Upbeat Q2 Revenue View
For the second quarter of 2026, the company expects revenue in the range of $180 million to $198 million, implying continued sequential growth. Non-GAAP gross margin is projected between 29% and 30% as AAOI balances higher volumes with ongoing manufacturing and ramp-related costs.
Applied Optoelectronics guided non-GAAP earnings ranging from a loss of 3 cents per share to earnings of 3 cents per share.
Zacks Rank & Upcoming Earnings to Consider
Applied Optoelectronics currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader Zacks Computer and Technology sector that are set to report their quarterly results are Cisco Systems CSCO, Applied Materials AMAT and Keysight Technologies KEYS. Keysight Technologies sports a Zacks Rank #1 (Strong Buy) at present, while both Cisco and Applied Materials carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Cisco, Applied Materials and Keysight Technologies are set to report their respective quarterly results on May 13, 14 and 19. Year to date, shares of Cisco, Applied Materials and Keysight Technologies have returned 19.7%, 59.9% and 74.8%, respectively.
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This article originally published on Zacks Investment Research (zacks.com).
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- AAOI Q1 Loss Wider Than Expected on Higher Costs, Revenues Jump Y/Y
May 8, 2026 · zacks.com
Applied Optoelectronics posts wider Q1 loss while revenues jump 51%, ships first 800G volumes to a hyperscale customer, and guides Q2 sales to $180M-$198M.
- Applied Optoelectronics Stock Is Sliding: What's Happening?
May 8, 2026 · benzinga.com
Applied Optoelectronics Inc (NASDAQ:AAOI) shares are dipping on Friday despite Rosenblatt's boosted price target. Here's what you need to know.
- Applied Optoelectronics Announces Equity Grants To Employees Under Inducement Plan
May 8, 2026 · globenewswire.com
SUGAR LAND, Texas, May 08, 2026 (GLOBE NEWSWIRE) -- Applied Optoelectronics, Inc. (NASDAQ: AAOI), a leading provider of advanced optical and HFC networking products that power AI, today announced that the Compensation Committee of its Board of Directors granted inducement awards for 299 shares of common stock to 2 new employees, with a grant date of May 4, 2026, pursuant to the Applied Optoelectronics, Inc. 2023 Equity Inducement Plan (the “Inducement Plan”).
- APPLIED OPTOELECTRONICS ANNOUNCES EQUITY GRANTS TO EMPLOYEES UNDER INDUCEMENT PLAN
May 8, 2026
SUGAR LAND, TEXAS, MAY 08, 2026 (GLOBE NEWSWIRE) -- APPLIED OPTOELECTRONICS, INC. (NASDAQ: AAOI), A LEADING PROVIDER OF ADVANCED OPTICAL AND HFC NETWORKING PRODUCTS THAT POWER AI, TODAY ANNOUNCED THAT THE COMPENSATION COMMITTEE OF ITS BOARD OF DIRECTORS GRANTED INDUCEMENT AWARDS FOR 299 SHARES OF COMMON STOCK TO 2 NEW EMPLOYEES, WITH A GRANT DATE OF MAY 4, 2026, PURSUANT TO THE APPLIED OPTOELECTRONICS, INC. 2023 EQUITY INDUCEMENT PLAN (THE “INDUCEMENT PLAN”).
- Applied Optoelectronics (AAOI) Reports Q1 Loss, Misses Revenue Estimates
May 7, 2026 · zacks.com
Applied Optoelectronics (AAOI) came out with a quarterly loss of $0.07 per share versus the Zacks Consensus Estimate of a loss of $0.05. This compares to a loss of $0.02 per share a year ago.
