Applied Optoelectronics Inc. (NASDAQ:AAOI) stock rose about 5% during Friday’s premarket session, rebounding after Thursday’s sharp decline as sentiment improved across artificial intelligence-related stocks.
Nasdaq futures gained 0.80%, while S&P 500 futures climbed 0.40%, signaling a positive start for Wall Street.
OpenAI Revenue Concerns Trigger Selloff
Applied Optoelectronics and other fiber-optic connectivity stocks came under pressure Thursday following reports that OpenAI’s annualized revenue was lower than previously indicated.
According to Benzinga Pro, the reports raised concerns about demand for AI infrastructure, weighing on companies tied to data center expansion.
OpenAI’s annualized revenue reportedly reached nearly $50 billion in September, about $20 billion below earlier indications.
The difference reportedly reflected how revenue from cloud partners was counted rather than a confirmed slowdown in underlying demand.
Still, the report fueled concerns about whether AI companies could generate enough revenue to justify massive infrastructure investments.
Bloomberg’s Lisa Abramowicz highlighted the market reaction as evidence of the technology sector’s growing dependence on OpenAI and rival Anthropic.
Broader market weakness added to Thursday’s selling pressure. Minutes from the Federal Reserve’s Sept. 15-16 meeting also showed that most policymakers expected another interest rate hike before year-end.
Higher borrowing costs can weigh on technology stocks by reducing the present value of expected future earnings.
Completes $600 Million Stock Offering
The rebound also comes days after Applied Optoelectronics announced a major capital raise to support its AI infrastructure expansion.
On Monday, the company completed its $600 million at-the-market equity offering, generating approximately $588 million in net proceeds.
Applied Optoelectronics sold 5.69 million shares at an average price of $105.36 each. This marked its third completed equity offering program in 2026.
Proceeds To Support AI Manufacturing Expansion
CEO Thompson Lin said the offering strengthens the company’s balance sheet and supports rising demand for high-speed optical connectivity in AI data centers.
The company plans to use the proceeds primarily to expand manufacturing capacity and purchase production and research equipment. The funds may also support debt repayment, working capital and other corporate needs.
However, issuing additional shares dilutes existing shareholders’ ownership stakes by increasing the total number of shares outstanding.
The larger share count can also dilute earnings per share unless future profit growth offsets the increase.
While the offering provides capital for expansion, investors will be watching whether the investments generate enough returns to justify the dilution.
Applied Optoelectronics Technical Analysis
Applied Optoelectronics is showing signs of stabilization, although its technical indicators remain mixed.
The stock trades 5.3% above its 20-day simple moving average (SMA) of $105.77 and 0.7% above its 200-day SMA of $110.61.
However, shares remain 1.9% below the 50-day SMA of $113.50 and 14.3% below the 100-day SMA of $129.97.
These levels suggest the stock still faces resistance following its recent pullback.
The relative strength index (RSI) stands at 49.31, indicating neutral momentum. The reading suggests the stock is neither overbought nor oversold.
Meanwhile, the 20-day SMA remains below the 50-day SMA, signaling continued short-term weakness.
However, the 50-day SMA remains above the 200-day SMA. This suggests the longer-term trend remains relatively constructive despite the stock’s decline from its May 52-week high.
Traders are watching two key price levels:
- Key Resistance: $117.00. A sustained move above this level could signal renewed buying interest and support further gains.
- Key Support: $94.00. This area represents a previous zone of buying interest. A break below it could signal additional weakness.
Applied Optoelectronics Price Action
Applied Optoelectronics shares climbed 5.05% to $111.25 during Friday’s premarket trading, according to Benzinga Pro data.
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