Applied Optoelectronics Shares Jump 12% on Partnership With Microsoft

• Applied Optoelectronics, Inc. (NASDAQ:AAOI) reported a significant revenue increase in the fourth quarter, reaching just under $100 million.
• The company's stock experienced notable fluctuations, initially dipping by 0.6% post-earnings release, then surging by 24%.
• AAOI's strategic initiatives, including the grant of inducement awards to new employees, aim to drive long-term growth and capitalize on the rising demand for fiber-optic products.

Applied Optoelectronics, Inc. (NASDAQ:AAOI) is a key player in the fiber-optic access network products industry. The company is known for its innovative solutions that cater to the growing demand for high-speed internet and data transmission. Recently, Kuo David C, an officer of the company, sold 11,426 shares at $19.10 each, retaining 153,900 shares post-transaction.

The company's stock has seen notable fluctuations. After releasing its first earnings report for 2025, AAOI's stock initially dipped by 0.6% but then surged by 24% by the following Monday. This volatility reflects investor reactions to the company's financial performance and future prospects. The stock is currently priced at $19.11, with a market cap of approximately $1.06 billion.

In its latest earnings report, Applied Optoelectronics reported a significant revenue increase for the fourth quarter, reaching just under $100 million, compared to $40.7 million in the same period of 2024. This growth aligns closely with analyst estimates of $99.4 million. The company also managed to reduce its non-GAAP loss to $900,000, or $0.02 per share, meeting consensus projections.

To attract new talent, AAOI has granted inducement awards under its 2023 Equity Inducement Plan. The company awarded 11,860 shares of common stock to five new employees. These restricted stock units will vest over four years, aligning with Nasdaq Listing Rule 5635(c)(4). This strategy aims to strengthen the company's workforce and drive future growth.

Despite recent stock price fluctuations, AAOI's financial performance and strategic initiatives indicate a focus on long-term growth. The company's ability to increase revenue and reduce losses demonstrates its resilience in a competitive market. As the demand for fiber-optic products continues to rise, AAOI remains well-positioned to capitalize on industry trends.

Shares of Applied Optoelectronics (NASDAQ:AAOI) surged more than 12% pre-market today following the company's announcement of a new agreement with Microsoft (NASDAQ:MSFT). Under the agreement, Applied Optoelectronics will offer specific design and assembly services for goods to Microsoft. The duration of the agreement is set for five years and will renew automatically unless either party terminates it.

The scope of work within the agreement includes provisions that emphasize Applied Optoelectronics' commitment to maintaining a dedicated production line for the goods and offering a three-year warranty for them, as stated by the company.