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Live: Will Applied Optoelectronics Disappoint With Q3 Earnings Tonight After 18% Intraday Plunge?

By Thomas Richmond · Updated Nov 5, 3:46pm ET · Published Nov 5, 3:10pm ET

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AAOI Traders Brace for a Massive Earnings Surprise Tonight

AAOI Applied Optoelectronics
Options positioning
Put/call 0.76Balanced
CallsPuts
ATM implied vol
279.5%
Expiry
Fri, Nov 6chain as of Wed, Nov 4

At-the-money implied volatility of 279.5% on the $61 strike into Friday expiration says the options market expects tonight's report to move this stock violently in either direction. The 0.76 put/call ratio leans call-heavy overall, yet open interest is stacked on the put side right at the money, with 846 puts versus 106 calls at $60: read directly, that is hedging or downside positioning after the 60% monthly slide, though crowded protection at a single strike can just as easily fuel a squeeze if the 1.6T ramp lands.

Open interest near the money · puts / calls
  • $58
    99 / 1
  • $59
    122 / 1
  • $60
    846 / 106
  • $61
    188 / 1
  • $62
    292 / 42
  • $63
    260 / 39

Applied Optoelectronics: Key Takeaways From Last Quarter

AAOI Applied Optoelectronics
Last quarter — Q2 2026
EPS
$0.06vs $0.01 est +300.0%
Revenue
$192Mvs $190M est +0.8%

Q2 showed Applied Optoelectronics can convert hyperscaler demand into actual profit, with the datacenter mix carrying margins. That makes tonight's report a question of shipments: investors want proof the 1.6T order moved out the door in the quarter, which is exactly what the 60% one-month slide flagged this afternoon is pricing against.

next print Thu, Nov 5

Analysts' Top Questions for AAOI Ahead of Q3 Earnings Tonight

AAOI Applied Optoelectronics
Call preview · Q3 2026
Thu, Nov 5 Earnings call · after close

Hyperscale customer traction and the 800G/1.6T ramp have come up on all four of the last four calls, and tonight the question is whether management confirms 1.6T shipments against the $200 million-plus order flagged earlier today. Gross margin and product mix, now a question three calls running, is the second tell, since the mix shift decides whether the ramp actually earns anything.

Analyst hot topics · last 4 calls
Q3 25Q4 25Q1 26Q2 26
  • 800G and 1.6T transceiver ramp
  • Vertical integration and laser supply
  • Capacity expansion and manufacturing
  • Hyperscale customer traction
  • Gross margin and product mix
  • CATV segment outlook

Applied Optoelectronics Crashes 60% in a Month - Will Tonight's Q3 Earnings Send it Lower?

Applied Optoelectronics heads into tonight’s earnings report with enormous expectations and a stock that’s plunged 60% in just one month.

The biggest question is whether the company has begun shipping its next-generation 1.6T optical products to a major hyperscaler, following plans to start fulfilling a $200 million-plus order late in the third quarter.

Key Numbers to Watch:

  • Q3 EPS Estimate: $0.14, compared with management’s guidance of $0.11 to $0.26.
  • 2026 Revenue Outlook: Approximately $1.1 billion.
  • 2027 EPS Estimate: $4.60, reflecting expectations for massive earnings growth.
  • Share Count: 92.8 million assumed, highlighting dilution concerns.

Why It Matters:

Applied Optoelectronics is priced for enormous growth, but investors have clearly lost confidence in the near-term execution story.

Confirmation that 1.6T shipments are underway, alongside a clear capacity expansion timeline, could help restore that confidence. Any further delays or margin pressure could make an already brutal sell-off even worse.

This article is updated throughout the trading day. Check back for more.

Full Coverage

The story so far

Applied Optoelectronics (NASDAQ:AAOI) is expected to report third-quarter 2026 results tonight at 4:10 PM ET. The stock trades at $48.63, down 17.95% in today’s session, which turns this report into a credibility test for the AI optics ramp.

Record Sales Collide With a 60% Monthly Slide

Second-quarter revenue reached $191.9 million, up 86% year over year and the fifth consecutive quarter of record revenue. Non-GAAP EPS of $0.06 beat the $0.015 estimate as data center revenue rose 140.4% to $107.7 million.

Margins told a softer story. Non-GAAP gross margin came in at 29.8% versus 30.4% a year earlier, while Q2 capital investments hit $565.5 million, funded partly by $538.8 million in net at-the-market proceeds.

Sentiment has deteriorated since. Shares fell 40.85% over the past week, though they remain up 39.5% year to date.

Applied Optoelectronics’ Consensus Estimates

Metric Q3 2026 Estimate YoY Change FY 2026 Estimate FY 2027 Estimate
Revenue $268.1M +126.0% $1.04B $2.66B
EPS (Normalized) $0.1433 Swing from -$0.09 $0.68 $4.602

Revenue consensus sits inside the $255 million to $290 million guidance band. The EPS bar has dropped from $0.2783 over the past 90 days, with six downward revisions in 30 days, signaling analyst concerns on margins and dilution.

What to Watch Tonight: 1.6T Timing, a 100G Gap, and Margins

1.6T is the first item I’ll watch. Management targeted full qualification with a major hyperscaler and said a $200 million-plus order would ship “very late in the third quarter.” CEO Thompson Lin estimated Q4 1.6T revenue at $70 million to $80 million, so any shortfall could change the year.

Investors are also going to be tracking 800G, which management projected would grow nearly 5x in Q3. Offsetting that, a switch-memory shortage was set to cost $20 million to $25 million of 100G revenue.

CATV offers stability. Guidance called for $100 million to $110 million, and the company shipped its 1 millionth 1.8GHz amplifier in September.

Capacity and margins are other top items analysts will be watching. The company targets 650,000 800G and 1.6T units per month by year-end against a 29% to 30.5% gross margin guide. Customer concentration also matters, since the top 10 customers generated 99% of Q2 revenue.

AAOI’s Earnings History

Quarter EPS Surprise Day-of Move 1-Day Move 7-Day Move 30-Day Move
Q2 2026 +300% +9.19% -2.08% +10.8% -20.42%
Q1 2026 -44.93% -5.46% +24.14% +27.81% +17.58%
Q4 2025 +91.07% +56.88% +21.7% +13.48% +0.43%
Q3 2025 -2.27% -1.82% -11.03% -24.87% +22.44%

On average, shares have moved 6.8% in the seven days following earnings over the past year.

AAOI earnings explorer

Contact [email protected] for any questions or corrections.

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Thomas Richmond

Thomas Richmond is a financial writer and content strategist with 5+ years of experience covering stocks and financial markets. He has published over 500 articles focused on individual stock analysis, helping investors better understand business fundamentals, stock valuations, and long-term opportunities.

Thomas previously served as a Content Lead at TIKR, a stock research platform, where he helped scale the company’s blog to hundreds of articles per month and contributed to a weekly newsletter reaching more than 100,000 investors.

Outside of work, Thomas enjoys weight lifting and soccer.

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