Applied Optoelectronics: Why This $12B Turnaround Is Just Getting Started

Applied Optoelectronics (AAOI) has transformed from a struggling mid-cap into a $12B AI infrastructure contender, earning a buy rating. AAOI's vertical integration, especially in laser production, provides cost, supply chain, and R&D advantages over assembler-based competitors. Recent catalysts include a $20.9M Texas grant, aggressive capacity expansion, and strong hyperscaler partnerships with Amazon, Oracle, and Microsoft.