Analysis of AAOI Put Selling Strategy
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jan 30 2026
0mins
Should l Buy AAOI?
Source: NASDAQ.COM
- Options Selling Risk: Selling puts on AAOI does not provide the same upside potential as owning shares, as the seller only acquires shares if the contract is exercised, indicating a higher risk profile.
- Yield Analysis: Unless AAOI's stock declines by 66.4%, the put seller can only profit from an 11.8% annualized return, highlighting the limited profit potential of this strategy.
- Volatility Consideration: With a trailing twelve-month volatility of 123% for AAOI, combining this with fundamental analysis can assist investors in determining whether selling the January 2028 put at a $15 strike price is worthwhile.
- Market Price Comparison: The seller only benefits at the $15 strike if the contract is exercised, necessitating an evaluation of the current market price relative to the strike price to assess potential investment returns.
Trade with 70% Backtested Accuracy
Stop guessing "Should I Buy AAOI?" and start using high-conviction signals backed by rigorous historical data.
Sign up today to access powerful investing tools and make smarter, data-driven decisions.
Analyst Views on AAOI
Wall Street analysts forecast AAOI stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for AAOI is 38.25 USD with a low forecast of 15.00 USD and a high forecast of 50.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
4 Analyst Rating
3 Buy
0 Hold
1 Sell
Moderate Buy
Current: 38.130
Low
15.00
Averages
38.25
High
50.00
Current: 38.130
Low
15.00
Averages
38.25
High
50.00
About AAOI
Applied Optoelectronics, Inc. is a vertically integrated provider of fiber-optic networking products. The Company designs and manufactures a range of optical communications products at varying levels of integration, from components, subassemblies, and modules to complete turn-key equipment. The Company also designs, manufactures, and integrates its own analog and digital lasers using the proprietary Molecular Beam Epitaxy (MBE) and Metal Organic Chemical Vapor Deposition (MOCVD) alternative processes for the fabrication of lasers. The Company manufactures lasers and laser components and performs research and development activities for laser component and optical module products. The Company offers its fiber-optic networking products, primarily for four networking end-markets, such as cable television, (CATV), Internet data center, telecommunications, (telecom), and fiber-to-the-home (FTTH). The Company has manufacturing facilities in Taipei, Taiwan and Ningbo, China.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Applied Optoelectronics Executive Sells Shares
- Insider Selling Details: On January 28, 2026, Applied Optoelectronics' Senior Vice President and Chief Legal Officer David C Kuo sold 12,000 shares valued at approximately $540,660, representing 9.48% of his holdings and reducing his ownership stake to 0.17% in the company.
- Trading Plan Context: Kuo's share sale was executed under a pre-scheduled Rule 10b5-1 trading plan, indicating that this transaction was not made at his discretion on the sale date, but rather planned in advance, reflecting a strategic approach to market fluctuations.
- Market Performance Review: Although AAOI's stock price increased by about 20% in January 2026, it experienced a disappointing 4% decline throughout 2025, highlighting the company's struggles with high operating costs and persistent negative net margins, particularly in the challenging U.S. fiber optic market.
- Investor Considerations: The company has reported negative net losses since 2019, prompting investors to closely monitor its operational challenges, especially given the high costs and infrastructure issues in the fiber optic sector that could impact future profitability and market performance.
See More
Applied Optoelectronics Executive Sells Shares Amid Market Concerns
- Executive Sell-off: David C Kuo, Senior VP and Chief Legal Officer of Applied Optoelectronics, sold 12,000 shares on January 28, 2026, for approximately $540,660, reducing his direct holdings to 114,636 shares, which represents 0.17% of total outstanding shares.
- Transaction Pattern: This sale aligns with Kuo's median sale size of 12,250 shares since November 2024, indicating a consistent pattern of disposals; despite a 20% increase in stock price in January, the overall performance remains concerning.
- Financial Overview: Applied Optoelectronics has a market capitalization of $2.98 billion and a one-year price change of 64.38%, yet it has reported negative net margins since 2019, struggling with high operating costs, particularly in U.S. infrastructure implementation.
- Investor Considerations: While Kuo's sale was part of a pre-scheduled trading plan, investors should remain vigilant regarding the company's ongoing negative margins and operational challenges, which could adversely affect future stock performance.
See More
Analysis of AAOI Put Selling Strategy
- Options Selling Risk: Selling puts on AAOI does not provide the same upside potential as owning shares, as the seller only acquires shares if the contract is exercised, indicating a higher risk profile.
- Yield Analysis: Unless AAOI's stock declines by 66.4%, the put seller can only profit from an 11.8% annualized return, highlighting the limited profit potential of this strategy.
- Volatility Consideration: With a trailing twelve-month volatility of 123% for AAOI, combining this with fundamental analysis can assist investors in determining whether selling the January 2028 put at a $15 strike price is worthwhile.
- Market Price Comparison: The seller only benefits at the $15 strike if the contract is exercised, necessitating an evaluation of the current market price relative to the strike price to assess potential investment returns.
See More
Applied Optoelectronics' David Kuo Sells 12,500 Shares for $501,875
- Insider Selling: David Kuo, Chief Legal Officer of Applied Optoelectronics, sold 12,500 shares on December 23, 2025, for a total of $501,875 at $40.15 per share, reflecting his ongoing strategy of position reduction over the past year.
- Ownership Impact: This transaction represented 8.71% of Kuo's direct holdings, slightly above his recent median sell size of 7.67%, indicating a cautious outlook on the company's future performance.
- Market Performance: Kuo's sale coincided with Applied Optoelectronics reaching a 52-week high of $41.96, following a strong third-quarter revenue of $118.6 million, which marked an 81.9% increase year-over-year, highlighting robust market demand.
- Future Outlook: While the company forecasts Q4 revenue between $125 million and $140 million, it still faces a net loss of $17.9 million, prompting investors to carefully assess the elevated price-to-sales ratio and consider waiting for a more favorable buying opportunity.
See More
Applied Optoelectronics' CLO David Kuo Sells 12,500 Shares for $501,875
- Executive Sale: David Kuo, Chief Legal Officer of Applied Optoelectronics, sold 12,500 shares on December 23, 2025, for $501,875, representing 8.71% of his holdings, reducing direct ownership from 143,448 to 130,948 shares, indicating a strategic decision to liquidate at a high stock price.
- Compliance with Trading Plan: This transaction was executed under a Rule 10b5-1 trading plan established in May 2025, suggesting that the sale is not a red flag for insider trading, but rather reflects the stock's stability at a high valuation.
- Strong Revenue Growth: Applied Optoelectronics reported $118.6 million in revenue for Q3 2025, an 81% increase from $65.2 million in the previous year, with Q4 revenue forecasted between $125 million and $140 million, indicating robust market demand.
- Profitability Challenges: Despite significant revenue growth, the company reported a net loss of $17.9 million in Q3, highlighting ongoing profitability issues that may affect investor confidence moving forward.
See More
Applied Optoelectronics' CLO David Kuo Sells 12,500 Shares for $501,875
- Executive Sell-off: Chief Legal Officer David Kuo sold 12,500 shares on December 23, 2025, for $501,875, representing 8.71% of his direct holdings, indicating a consistent reduction strategy over time.
- Ownership Change: Post-transaction, Kuo's direct ownership decreased from 143,448 to 130,948 shares, with a subsequent value of $5,321,726.72, reflecting his ongoing engagement with the company's stock.
- Market Performance: The sale coincided with Applied Optoelectronics hitting a 52-week high of $41.96, as the company reported $118.6 million in revenue for Q3 2025, an 82% increase year-over-year.
- Future Outlook: Despite forecasting Q4 revenue between $125 million and $140 million, the company reported a net loss of $17.9 million, prompting investors to carefully consider the timing of new purchases.
See More
Applied Optoelectronics Executive Sells Shares
- Insider Selling Details: On January 28, 2026, Applied Optoelectronics' Senior Vice President and Chief Legal Officer David C Kuo sold 12,000 shares valued at approximately $540,660, representing 9.48% of his holdings and reducing his ownership stake to 0.17% in the company.
- Trading Plan Context: Kuo's share sale was executed under a pre-scheduled Rule 10b5-1 trading plan, indicating that this transaction was not made at his discretion on the sale date, but rather planned in advance, reflecting a strategic approach to market fluctuations.
- Market Performance Review: Although AAOI's stock price increased by about 20% in January 2026, it experienced a disappointing 4% decline throughout 2025, highlighting the company's struggles with high operating costs and persistent negative net margins, particularly in the challenging U.S. fiber optic market.
- Investor Considerations: The company has reported negative net losses since 2019, prompting investors to closely monitor its operational challenges, especially given the high costs and infrastructure issues in the fiber optic sector that could impact future profitability and market performance.
See More
Applied Optoelectronics Executive Sells Shares Amid Market Concerns
- Executive Sell-off: David C Kuo, Senior VP and Chief Legal Officer of Applied Optoelectronics, sold 12,000 shares on January 28, 2026, for approximately $540,660, reducing his direct holdings to 114,636 shares, which represents 0.17% of total outstanding shares.
- Transaction Pattern: This sale aligns with Kuo's median sale size of 12,250 shares since November 2024, indicating a consistent pattern of disposals; despite a 20% increase in stock price in January, the overall performance remains concerning.
- Financial Overview: Applied Optoelectronics has a market capitalization of $2.98 billion and a one-year price change of 64.38%, yet it has reported negative net margins since 2019, struggling with high operating costs, particularly in U.S. infrastructure implementation.
- Investor Considerations: While Kuo's sale was part of a pre-scheduled trading plan, investors should remain vigilant regarding the company's ongoing negative margins and operational challenges, which could adversely affect future stock performance.
See More
Analysis of AAOI Put Selling Strategy
- Options Selling Risk: Selling puts on AAOI does not provide the same upside potential as owning shares, as the seller only acquires shares if the contract is exercised, indicating a higher risk profile.
- Yield Analysis: Unless AAOI's stock declines by 66.4%, the put seller can only profit from an 11.8% annualized return, highlighting the limited profit potential of this strategy.
- Volatility Consideration: With a trailing twelve-month volatility of 123% for AAOI, combining this with fundamental analysis can assist investors in determining whether selling the January 2028 put at a $15 strike price is worthwhile.
- Market Price Comparison: The seller only benefits at the $15 strike if the contract is exercised, necessitating an evaluation of the current market price relative to the strike price to assess potential investment returns.
See More
Applied Optoelectronics' David Kuo Sells 12,500 Shares for $501,875
- Insider Selling: David Kuo, Chief Legal Officer of Applied Optoelectronics, sold 12,500 shares on December 23, 2025, for a total of $501,875 at $40.15 per share, reflecting his ongoing strategy of position reduction over the past year.
- Ownership Impact: This transaction represented 8.71% of Kuo's direct holdings, slightly above his recent median sell size of 7.67%, indicating a cautious outlook on the company's future performance.
- Market Performance: Kuo's sale coincided with Applied Optoelectronics reaching a 52-week high of $41.96, following a strong third-quarter revenue of $118.6 million, which marked an 81.9% increase year-over-year, highlighting robust market demand.
- Future Outlook: While the company forecasts Q4 revenue between $125 million and $140 million, it still faces a net loss of $17.9 million, prompting investors to carefully assess the elevated price-to-sales ratio and consider waiting for a more favorable buying opportunity.
See More
Applied Optoelectronics' CLO David Kuo Sells 12,500 Shares for $501,875
- Executive Sale: David Kuo, Chief Legal Officer of Applied Optoelectronics, sold 12,500 shares on December 23, 2025, for $501,875, representing 8.71% of his holdings, reducing direct ownership from 143,448 to 130,948 shares, indicating a strategic decision to liquidate at a high stock price.
- Compliance with Trading Plan: This transaction was executed under a Rule 10b5-1 trading plan established in May 2025, suggesting that the sale is not a red flag for insider trading, but rather reflects the stock's stability at a high valuation.
- Strong Revenue Growth: Applied Optoelectronics reported $118.6 million in revenue for Q3 2025, an 81% increase from $65.2 million in the previous year, with Q4 revenue forecasted between $125 million and $140 million, indicating robust market demand.
- Profitability Challenges: Despite significant revenue growth, the company reported a net loss of $17.9 million in Q3, highlighting ongoing profitability issues that may affect investor confidence moving forward.
See More
Applied Optoelectronics' CLO David Kuo Sells 12,500 Shares for $501,875
- Executive Sell-off: Chief Legal Officer David Kuo sold 12,500 shares on December 23, 2025, for $501,875, representing 8.71% of his direct holdings, indicating a consistent reduction strategy over time.
- Ownership Change: Post-transaction, Kuo's direct ownership decreased from 143,448 to 130,948 shares, with a subsequent value of $5,321,726.72, reflecting his ongoing engagement with the company's stock.
- Market Performance: The sale coincided with Applied Optoelectronics hitting a 52-week high of $41.96, as the company reported $118.6 million in revenue for Q3 2025, an 82% increase year-over-year.
- Future Outlook: Despite forecasting Q4 revenue between $125 million and $140 million, the company reported a net loss of $17.9 million, prompting investors to carefully consider the timing of new purchases.
See More
