Market Overview

Applied Optoelectronics Disappoints Investors, Again

Applied Optoelectronics Disappoints Investors, Again
Related AAOI
33 Stocks Moving In Friday's Pre-Market Session
80 Biggest Movers From Yesterday

Shares of Applied Optoelectronics (NASDAQ: AAOI) lost more than 20 percent Friday morning. The company announced Thursday afternoon its largest customer,, Inc. (NASDAQ: AMZN), is no longer placing orders to buy its components.

The announcement was made in conjunction with a revision to Applied's third-quarter revenue guidance and it's difficult to imagine how the company can recover the lost revenue, BWS Financial's Hamed Khorsand commented in a report. In fact, Amazon was placing orders at the 100G level and there are multiple competitors Amazon already uses for 100G.

"This is only the beginning of the challenges Applied Optoelectronics could face in the coming quarters," the analyst emphasized. Accordingly, Khorsand maintains a Sell rating on Applied Optoelectronics' stock with an unchanged $25 price target.

The announcement marks the second time the company has "disappointed investors," the analyst said. The first being Intel Corporation (NASDAQ: INTC)'s decision to ship competing CWDM4 transceivers in the third quarter, which poses a threat to its 100G sales it has been generating from another key client in Facebook Inc (NASDAQ: FB)

"The scope of decline in revenue and how we do not believe AMZN will be coming back in the fourth quarter in any meaningful way paves the way to reaffirm our $25 price target," Khorsand concluded.

Related Links:

Applied Optoelectronics Investors Be Warned: Q3 Will Be Weaker Than Expected

Roku, Snap The Top Stocks Among Short Sellers

Latest Ratings for AAOI

Nov 2018B. Riley FBRMaintainsNeutralNeutral
Nov 2018B. Riley FBRMaintainsNeutralNeutral
Oct 2018B. Riley FBRMaintainsNeutralNeutral

View More Analyst Ratings for AAOI
View the Latest Analyst Ratings

Posted-In: BWS Financial CWDM4 Hamed KhorsandAnalyst Color Reiteration Analyst Ratings Best of Benzinga


Related Articles (AMZN + AAOI)

View Comments and Join the Discussion!

Latest Ratings

MCDStephens & Co.Upgrades200.0
CZZJP MorganUpgrades13.0
View the Latest Analytics Ratings
Don't Miss Out!
Join Our Newsletter
Subscribe to:
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
Your weekly roundup of hot topics in the exciting world of fintech.
Thank You
for registering for Benzinga’s newsletters and alerts.
• The Daily Analysts Ratings email will be received daily between 7am and 10am.
• The Market in 5 Minutes email will be received daily between 7am and 8am.
• The Fintech Focus email will be received every Friday between 2pm and 5pm.

Wells Fargo Sharply Lower After Mixed Q3 Report

JNJ And IBM Report Q3 Earnings Early Next Week: What Might Be In Store?