Investors see-sawed in their sentiment on Applied Optoelectronics (AAOI 23.93%) 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.
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.