Applied Optoelectronics is emerging as a key supplier of fiber-optic networking products for AI data centers, with Zacks Consensus estimates projecting triple-digit EPS and revenue growth in 2026 and 2027. The company's AI data center segment is expanding as big tech firms build massive facilities filled with NVIDIA GPUs, where traditional copper interconnects face physical limits and rising copper prices make optics more attractive. A multi-year deal with Amazon, involving up to 8 million shares in exchange for advanced optical transceivers, provides revenue visibility and validation from a leading hyperscaler. Profit margins have nearly doubled since 2023, and the company's Texas manufacturing base insulates it from China supply-chain risks. AAOI shares recently retook the 50-day moving average and are breaking out of a bull flag pattern.
