Applied Optoelectronics, the Technology sector company, was revisited by a Wall Street analyst today. Analyst Ryan Koontz from Needham maintained a Buy rating on the stock and has a $38.00 price target.
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Ryan Koontz has given his Buy rating due to a combination of factors including the anticipation of Applied Optoelectronics’ new 800G products receiving approval in the fourth quarter, which is expected to act as a positive catalyst for the stock. Despite mixed third-quarter results and a guidance that fell below consensus, the company showed significant growth in its Cable segment, which increased by 237% year-over-year and 26% quarter-over-quarter.
Additionally, the rising demand for AI/cloud capital expenditures and transceivers, along with a shift in market share from Chinese competitors, presents a transformative opportunity for Applied Optoelectronics in the coming year. Although there are execution risks, the current stock pull-back is seen as a strong buying opportunity. Koontz maintains a Buy rating with a price target of $38, reflecting confidence in the company’s future prospects.