Supreme Court Rules Trump's Tariffs Invalid, Sparks Market Rally
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Feb 20 2026
0mins
Should l Buy AAOI?
Source: Benzinga
- Significant Ruling: The U.S. Supreme Court's 6-3 decision invalidates President Trump's tariffs under the International Emergency Economic Powers Act (IEEPA), impacting trade flows and market dynamics for nearly a year, and is expected to boost economic recovery.
- Tariff History: Trump imposed tariffs of 25% on imports from Canada and Mexico and raised Chinese tariffs to as high as 125%, with the administration claiming these measures could reduce the federal deficit by $4 trillion.
- Positive Market Reaction: Following the ruling, U.S. equities rallied sharply, with 10 stocks boasting market capitalizations of at least $2 billion posting the largest gains, reflecting investor optimism regarding the removal of tariffs.
- Future Economic Outlook: The Court's ruling underscores Congress's exclusive power to levy taxes, which may lead to future trade policies relying more on legislative processes, thereby influencing U.S. trade agreements and economic growth strategies.
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 fall
4 Analyst Rating
3 Buy
0 Hold
1 Sell
Moderate Buy
Current: 113.900
Low
15.00
Averages
38.25
High
50.00
Current: 113.900
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.
Optical and Networking Stocks Surge on Major Order Announcement
- Surge in Orders: Applied Optoelectronics announced a significant order for 800G single-mode data center transceivers from a major hyperscaler, resulting in a 9% stock price increase on Tuesday, reflecting strong market demand for network capacity expansion driven by AI workloads.
- Industry Impact: Following the news, Lumentum's stock rose approximately 7%, while Coherent and Ciena each saw nearly 5% gains, indicating that robust demand for optical networking products is positively influencing the entire sector.
- Market Divergence: Despite the overall positive trend in optical networking stocks, Credo Technology and Arista Networks experienced declines of about 3% and 2%, respectively, highlighting a divergence in market reactions that investors should carefully consider.
- Future Outlook: With the ongoing growth in AI demand, the new order from Applied Optoelectronics not only enhances its market position but also lays the groundwork for potential revenue growth in the future, attracting increased investor interest in this sector.
See More
US Stocks Decline Amid Ongoing Iran Conflict
- Market Performance: On Tuesday, the S&P 500 Index fell by 0.37%, the Dow Jones Industrial Average decreased by 0.18%, and the Nasdaq 100 Index dropped by 0.77%, reflecting investor concerns over the ongoing conflict in Iran and a general decline in market sentiment.
- Oil Price Fluctuations: WTI crude oil prices surged over 4%, reaching elevated levels due to Iran's missile and drone strikes on Israel and US bases, raising fears about energy supply disruptions that could impact global economic recovery.
- Economic Data: Despite market pressures, Q4 nonfarm productivity remained at 1.8%, while unit labor costs were revised up to 4.4%, exceeding expectations, indicating resilience in the economic fundamentals that may provide some support to the stock market.
- International Tensions: Reports of Saudi Arabia and the UAE aligning with the Iran conflict have heightened market anxiety, as investors are closely monitoring the potential for increased US military deployment, which could escalate tensions and affect global market stability.
See More
Corning Inc Sees Surge in Options Trading Volume
- Surge in Options Volume: Corning Inc (GLW) experienced an options trading volume of 68,851 contracts today, equating to approximately 6.9 million shares, which represents about 48.6% of its average daily trading volume of 14.2 million shares over the past month, indicating strong market interest in its future performance.
- High Strike Price Focus: Notably, the $160 strike call option for GLW has seen significant activity, with 4,390 contracts traded today, representing around 439,000 underlying shares, reflecting a strong bullish sentiment among investors at this price level.
- Applied Optoelectronics Options Activity: Concurrently, Applied Optoelectronics Inc (AAOI) has recorded an options trading volume of 62,819 contracts today, translating to approximately 6.3 million shares, which is about 47.7% of its average daily trading volume of 13.2 million shares over the past month, indicating investor interest in this company as well.
- AAOI Strike Price Trading: For AAOI, the $115 strike call option has also shown robust activity, with 5,018 contracts traded today, representing approximately 501,800 underlying shares, suggesting a positive outlook from the market regarding its future trajectory.
See More
Markets Decline Amid Uncertainty Over Iran Conflict
- Troop Deployment News: The Pentagon's plan to send 3,000 soldiers to the Middle East caused markets to decline after an earlier rally, reflecting ongoing uncertainty over the Iran conflict, which may dampen investor confidence.
- Oil Price Surge: West Texas Intermediate crude rose about 5% to $92 per barrel, indicating market sensitivity to geopolitical risks that could lead to volatility in energy stocks.
- Optical Market Activity: Applied Optoelectronics announced a new order worth over $53 million for 800G data center transceivers, driving its stock up nearly 20% and boosting shares of Corning and other optical companies, signaling strong demand in the sector.
- Home Depot Acquisition: Home Depot's SRS Distribution subsidiary is acquiring HVAC distributor Mingledorff's, expanding its total addressable market to $1.2 trillion, aligning with its strategy to enhance offerings for professional customers, which is expected to drive future revenue growth.
See More
US Stocks Decline Amid Ongoing Iran Conflict
- Market Movement: The S&P 500 Index is down 0.16%, while the Dow Jones Industrial Average is up 0.13%, and the Nasdaq 100 Index has decreased by 0.50%, reflecting investor concerns over the ongoing Iran conflict, which is dampening market sentiment.
- Rising Energy Prices: WTI crude oil prices have surged over 4% due to Iran's missile strikes on Israel and US bases, which not only limits stock market declines but also raises inflation expectations, potentially influencing future monetary policy decisions.
- Economic Data Performance: The US Q4 nonfarm productivity remained unchanged at 1.8%, while unit labor costs were revised up to 4.4% from 2.8%, exceeding market expectations, indicating economic resilience that may support the stock market.
- International Tensions Impact: Saudi Arabia and the UAE have taken steps toward joining the Iran war, potentially escalating the conflict, which increases market concerns about future geopolitical risks and drives investors towards safer assets.
See More
Circle's Shares Plunge 19% Following Tether's Audit Announcement
- Stablecoin Market Turmoil: Circle's shares plummeted approximately 19% after rival Tether announced it hired a Big Four accounting firm to audit its USDT reserves, raising concerns over transparency in the stablecoin market and potentially undermining investor confidence and market stability.
- SAP Rating Downgrade: SAP's stock fell 4% following JPMorgan's downgrade from overweight to neutral and a price target reduction from €260 to €175, with analysts noting that the company's cloud backlog is likely to decelerate further as the migration base matures, increasing uncertainty around future performance.
- Surge in Optical Component Demand: Applied Optoelectronics saw a 14% increase in shares after announcing a new order for 800G data center transceivers from a major hyperscale customer, which not only boosts revenue expectations but also strengthens its market position in the optical manufacturing sector.
- Network Equipment Market Shift: Netgear's stock surged 16% after the FCC banned imports of consumer routers made abroad due to national security risks, a policy change that is likely to enhance Netgear's competitive advantage in the domestic market.
See More
Optical and Networking Stocks Surge on Major Order Announcement
- Surge in Orders: Applied Optoelectronics announced a significant order for 800G single-mode data center transceivers from a major hyperscaler, resulting in a 9% stock price increase on Tuesday, reflecting strong market demand for network capacity expansion driven by AI workloads.
- Industry Impact: Following the news, Lumentum's stock rose approximately 7%, while Coherent and Ciena each saw nearly 5% gains, indicating that robust demand for optical networking products is positively influencing the entire sector.
- Market Divergence: Despite the overall positive trend in optical networking stocks, Credo Technology and Arista Networks experienced declines of about 3% and 2%, respectively, highlighting a divergence in market reactions that investors should carefully consider.
- Future Outlook: With the ongoing growth in AI demand, the new order from Applied Optoelectronics not only enhances its market position but also lays the groundwork for potential revenue growth in the future, attracting increased investor interest in this sector.
See More
US Stocks Decline Amid Ongoing Iran Conflict
- Market Performance: On Tuesday, the S&P 500 Index fell by 0.37%, the Dow Jones Industrial Average decreased by 0.18%, and the Nasdaq 100 Index dropped by 0.77%, reflecting investor concerns over the ongoing conflict in Iran and a general decline in market sentiment.
- Oil Price Fluctuations: WTI crude oil prices surged over 4%, reaching elevated levels due to Iran's missile and drone strikes on Israel and US bases, raising fears about energy supply disruptions that could impact global economic recovery.
- Economic Data: Despite market pressures, Q4 nonfarm productivity remained at 1.8%, while unit labor costs were revised up to 4.4%, exceeding expectations, indicating resilience in the economic fundamentals that may provide some support to the stock market.
- International Tensions: Reports of Saudi Arabia and the UAE aligning with the Iran conflict have heightened market anxiety, as investors are closely monitoring the potential for increased US military deployment, which could escalate tensions and affect global market stability.
See More
Corning Inc Sees Surge in Options Trading Volume
- Surge in Options Volume: Corning Inc (GLW) experienced an options trading volume of 68,851 contracts today, equating to approximately 6.9 million shares, which represents about 48.6% of its average daily trading volume of 14.2 million shares over the past month, indicating strong market interest in its future performance.
- High Strike Price Focus: Notably, the $160 strike call option for GLW has seen significant activity, with 4,390 contracts traded today, representing around 439,000 underlying shares, reflecting a strong bullish sentiment among investors at this price level.
- Applied Optoelectronics Options Activity: Concurrently, Applied Optoelectronics Inc (AAOI) has recorded an options trading volume of 62,819 contracts today, translating to approximately 6.3 million shares, which is about 47.7% of its average daily trading volume of 13.2 million shares over the past month, indicating investor interest in this company as well.
- AAOI Strike Price Trading: For AAOI, the $115 strike call option has also shown robust activity, with 5,018 contracts traded today, representing approximately 501,800 underlying shares, suggesting a positive outlook from the market regarding its future trajectory.
See More
Markets Decline Amid Uncertainty Over Iran Conflict
- Troop Deployment News: The Pentagon's plan to send 3,000 soldiers to the Middle East caused markets to decline after an earlier rally, reflecting ongoing uncertainty over the Iran conflict, which may dampen investor confidence.
- Oil Price Surge: West Texas Intermediate crude rose about 5% to $92 per barrel, indicating market sensitivity to geopolitical risks that could lead to volatility in energy stocks.
- Optical Market Activity: Applied Optoelectronics announced a new order worth over $53 million for 800G data center transceivers, driving its stock up nearly 20% and boosting shares of Corning and other optical companies, signaling strong demand in the sector.
- Home Depot Acquisition: Home Depot's SRS Distribution subsidiary is acquiring HVAC distributor Mingledorff's, expanding its total addressable market to $1.2 trillion, aligning with its strategy to enhance offerings for professional customers, which is expected to drive future revenue growth.
See More
US Stocks Decline Amid Ongoing Iran Conflict
- Market Movement: The S&P 500 Index is down 0.16%, while the Dow Jones Industrial Average is up 0.13%, and the Nasdaq 100 Index has decreased by 0.50%, reflecting investor concerns over the ongoing Iran conflict, which is dampening market sentiment.
- Rising Energy Prices: WTI crude oil prices have surged over 4% due to Iran's missile strikes on Israel and US bases, which not only limits stock market declines but also raises inflation expectations, potentially influencing future monetary policy decisions.
- Economic Data Performance: The US Q4 nonfarm productivity remained unchanged at 1.8%, while unit labor costs were revised up to 4.4% from 2.8%, exceeding market expectations, indicating economic resilience that may support the stock market.
- International Tensions Impact: Saudi Arabia and the UAE have taken steps toward joining the Iran war, potentially escalating the conflict, which increases market concerns about future geopolitical risks and drives investors towards safer assets.
See More
Circle's Shares Plunge 19% Following Tether's Audit Announcement
- Stablecoin Market Turmoil: Circle's shares plummeted approximately 19% after rival Tether announced it hired a Big Four accounting firm to audit its USDT reserves, raising concerns over transparency in the stablecoin market and potentially undermining investor confidence and market stability.
- SAP Rating Downgrade: SAP's stock fell 4% following JPMorgan's downgrade from overweight to neutral and a price target reduction from €260 to €175, with analysts noting that the company's cloud backlog is likely to decelerate further as the migration base matures, increasing uncertainty around future performance.
- Surge in Optical Component Demand: Applied Optoelectronics saw a 14% increase in shares after announcing a new order for 800G data center transceivers from a major hyperscale customer, which not only boosts revenue expectations but also strengthens its market position in the optical manufacturing sector.
- Network Equipment Market Shift: Netgear's stock surged 16% after the FCC banned imports of consumer routers made abroad due to national security risks, a policy change that is likely to enhance Netgear's competitive advantage in the domestic market.
See More
