Ticker Teardown Dossier
Applied Optoelectronics ($AAOI), taken apart the way the desk does.
Applied Optoelectronics (AAOI) Teardown Dossier · As of 2026-11-05, refreshed after Q3 2026 results
The AAOI dossier is the desk's Applied Optoelectronics teardown written out as a document, plus what a five-minute video cannot carry: the last eight quarters of Applied Optoelectronics's own SEC filings in one table (fiscal years for a foreign filer whose quarterly reports carry no structured data), a peer comparison with numbers, the level map rebuilt from the latest close, and a link to every filing used. Rebuilt after each quarterly print.
Look inside before you buy
2,055 words · about 9 min to read · 10 sections · data as of 5 November 2026 · last refreshed after Q3 2026 results
Table of contents
- What is in this dossier
- What this is not
- 1. The teardown
- The setup
- The business: what it actually sells
- The june quarter: reported august 6
- The split: the line nobody reads
- The guide: september quarter
- The reported line: read both
- The dilution: what capacity costs
- Two more risks
- The chart: the curated level map
- The verdict
- 2. What changed since it was written
- 3. The filings: the last eight quarters
- 4. Valuation against the peers
- 5. Level map
- 6. Sources
- 7. What this dossier cannot do
- More dossiers in this theme
Excerpt
1. The teardown
Written 2026-09-23, with prices as of 2026-09-22. Figures in this part are as the desk read them that day; parts 2 to 5 carry the numbers as of 2026-11-05.
The setup
Applied Optoelectronics just printed the biggest quarter in its history and guided the next one to more than double again. The stock closed Monday at $107, about 52% below its high. In May, on our site, we marked $108 to $110 as the zone that would test the whole correction. It is there. Is the market wrong?
The business: what it actually sells
Applied Optoelectronics makes fiber optic transceivers, the small pluggable modules at the ends of a fiber cable that turn electricity into laser light and back. Inside an AI data center, every rack of accelerators talks to the rest of the fabric through them. 400G and 800G are the current generation, and every new accelerator deployment pulls a fresh upgrade.
The june quarter: reported august 6
The June quarter, reported on the sixth of August, was the fifth consecutive record. Revenue $191.9 million, up 86% on the year and 27% on the quarter. 800 G volumes more than doubled sequentially. Adjusted net income was $5.5 million, six cents a share, back into adjusted profit. Management says demand keeps outrunning its own capacity into mid 2027.
One table from the document
3. The filings: the last eight quarters
| USD millions, period ended | 2024-12-31 | 2025-03-31 | 2025-06-30 | 2025-09-30 | 2025-12-31 | 2026-03-31 | 2026-06-30 | 2026-09-30 |
|---|---|---|---|---|---|---|---|---|
| Fiscal period | Q4 2024 | Q1 2025 | Q2 2025 | Q3 2025 | Q4 2025 | Q1 2026 | Q2 2026 | Q3 2026 |
| Source filing | 10-K 2025-02-28 | 10-Q 2025-05-08 | 10-Q 2025-08-07 | 10-Q 2025-11-06 | 10-K 2026-02-26 | 10-Q 2026-05-07 | 10-Q 2026-08-06 | 10-Q 2026-11-05 |
| Revenue | 100.3 | 99.9 | 103.0 | 118.6 | 134.3 | 151.1 | 191.9 | 269.9 |
| Gross margin | 28.7% | 30.6% | 30.3% | 28.0% | 31.2% | 29.1% | 27.7% | 28.2% |
| Operating income | -6.5 | -8.9 | -16.0 | -18.2 | -11.5 | -13.0 | -24.7 | -1.4 |
| Net income | -119.7 | -9.2 | -9.1 | -17.9 | -2.0 | -14.3 | -22.8 | 6.3 |
| Operating cash flow | -24.6 | -50.9 | -65.5 | -28.5 | -29.6 | -85.4 | 11.6 | -2.9 |
| Capex | -28.4 | -28.4 | -25.5 | -50.2 | -75.0 | -58.2 | n/r | -367.0 |
| Free cash flow | -53.0 | -79.3 | -91.0 | -78.7 | -104.6 | -143.6 | n/r | -369.9 |
| Cash and equivalents | 67.4 | 51.1 | 64.7 | 137.0 | 206.1 | 439.7 | 499.7 | 605.4 |
| Debt (book, excl. leases) | 26.7 | 22.1 | 0.1 | 130.1 | 34.0 | 129.5 | 129.1 | 128.8 |
| Diluted shares (M) | 41.5* | 50.0 | 56.8 | 63.3 | 60.2* | 76.0 | 81.6 | 87.8 |
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What the dossier has that the video does not
The filings themselves: revenue, gross margin, operating income, net income, operating cash flow, capex, free cash flow, cash, debt and diluted shares, quarter by quarter, each column dated with the filing it comes from. A foreign filer whose quarterly reports carry no structured data gets its fiscal years, and the dossier says so.
Never stale
Every dossier carries an "as of" date and the quarter it was last refreshed after. It is rebuilt after each print, and the desk's daily check flags any dossier left more than 45 days without a refresh. The written teardown keeps its date, and a "what changed since" section gives the move in the price and the filings since.
What is inside
- The teardown in writing: the business, the bull case, the full bear case and the verdict, dated.
- What changed since it was written: the price move and every SEC filing since.
- Eight quarters of the company's own SEC filings in one table, each column dated, with a plain read of what the table says.
- Peers with numbers: market cap, revenue growth, operating margin, EV / sales and distance from the 52-week high.
- The level map rebuilt from the latest close: where the price sits against the 52-week range and each level.
- Sources: a link to every filing and results release used.
Buy it if
- You hold or watch $AAOI and want a structured read before acting.
- You want levels you can check on the chart, not an opinion.
Skip it if
- You want a buy signal. A dossier explains and maps; it does not signal.
- You want every name on the desk. The Teardown Library covers every dossier, current and future, for less than four dossiers.
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An educational research publication, not investment advice, trade signals, a managed account, or an advisory service. Nothing in it is a recommendation to buy or sell any security. See our disclosures.