Applied Optoelectronics Stock Soared on Monday

Investors see-sawed in their sentiment on Applied Optoelectronics (NASDAQ: AAOI) stock these past two trading days. The optical communications products specialist's shares were down 0.6% Friday, following the publication of its latest quarterly earnings report the day before, but soared 24% on Monday.

Revenue jumped

That release was Applied's first set of figures for 2025. These revealed that the company's revenue was a shade under $100 million for the fourth quarter, well above the $40.7 million it reaped in the same period of 2024.

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In terms of profitability, the company managed to narrow its non-GAAP (adjusted) loss. Its shortfall was $900,000 ($0.02 per share), compared to a loss of $12 million in the year-ago quarter.

The top-line figure wasn't far away from the average analyst estimate of $99.4 million. Applied landed precisely on the consensus pundit projection of $0.02 for net loss, meanwhile.

The company proffered guidance for its current (first) quarter of the new fiscal year. It's anticipating $100 million to $110 million in revenue, filtering down into an adjusted net loss of $0.09 per share to $0.03. What's uncomfortable about this is that analysts are collectively modeling a $0.07 per share profit for the period, on $114 million in revenue.

The Monday bounce-back

One element dampening sentiment on Applied stock was its presence in China, where it has operated a manufacturing plant in the municipality of Ningbo for many years. With Monday's announcement of a pause/reduction -- at least -- on the Trump administration's tariffs on that country, investors breathed a big sigh of relief. They expressed this by pushing Applied's stock up by 24% that day.

I think the company has a fine opportunity in front of it with the data center segment, but it really needs to flip those bottom-line numbers into the black. It's been profitable before, and investors will be expecting it to return to that state before long.

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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.