Why Applied Optoelectronics Surged Over 9% on Tuesday?

Applied Optoelectronics shares surged over ​9% on Tuesday, following a major supply agreement between Corning and Verizon Communications that lifted the fiber optics sector broadly.

The stock outperformed the broader market. The Nasdaq rose 0.06%, while the S&P 500 fell 0.40%. The technology sector gained 0.44%.

Corning and Verizon announced a multi-year, multi-billion-dollar supply agreement for optical fiber and connectivity products on Tuesday.

The deal appeared to boost sentiment across the fiber optics industry, with Applied Optoelectronics rising as investors renewed interest in companies poised to benefit from expanding fiber infrastructure demand.

See more:

Top Growth Stocks

Technical Analysis

Despite Tuesday's gain, AAOI remains below some key moving averages. The stock trades 5.4% below its 20-day simple moving average of $120.16 and ​3% below its 50-day simple moving average of $117.20.

However, shares remain 11.5% above the 200-day simple moving average of $101.98. The relative strength index stands at ​48.87, indicating neutral momentum.

The $117-$120 range may pose near-term resistance. Meanwhile, the $102 area near the 200-day simple moving average provides a key support zone.

Applied Optoelectronics Analyst Outlook

The stock carries a consensus rating of Buy with an average price target of $205.

Rosenblatt maintained a Buy rating and a $220 price target on August ​7. Needham also maintained a Buy rating the same day, but cut its price target from $220 to $190.

Edge Ranking

Applied Optoelectronics holds an Edge Momentum Score of ​98.16, reflecting strong relative price performance. Investors can track additional metrics via the Edge Scorecard.

Applied Optoelectronics ETF Holdings

AAOI is held by the Invesco Dorsey Wright Technology Momentum ETF, the Strive Small-Cap ETF, and the Golden Eagle Dynamic Ultra-Growth ETF.

AAOI Price Action

As of Tuesday's press time, Applied Optoelectronics shares were up ​9.19% at $115.23.