Shares of Applied Optoelectronics (AAOI) have surged over 200% this year as demand grows for its optical transceivers, which are used in AI data centers. The company supplies high-speed networking equipment, and demand for its products currently exceeds its production capacity.
Management projected approximately $1.1 billion in revenue for 2026. The company reaffirmed the forecast as recently as its Q2 earnings call, citing plans to expand manufacturing capacity to serve AI and data center customers. CEO Thompson Lin said near-term revenue is limited almost entirely by production capacity and component availability.