Applied Optoelectronics Set For Explosive Growth In AI Optical Tech By 2025, Says Bullish Analyst
Portfolio Pulse from Priya Nigam
Applied Optoelectronics Inc (NASDAQ:AAOI) is expected to see significant growth in AI optical technology sales by 2025, according to Rosenblatt Securities analyst Mike Genovese. Genovese initiated coverage with a Buy rating and a $23 price target, citing the potential for AAOI to capture over 10% of the AI 800+G Optical transceiver market, which is projected to reach $7.5 billion. He also forecasts a revenue of $485 million for AAOI in 2025, which may be conservative given the expected 40% growth rate. The company's gross margins have already expanded by more than 1,000 basis points to around 30% in 2023 and are expected to continue growing. Genovese's EPS forecast for 2025 is $1.15, which is 23% above consensus. AAOI shares were up 8.2% to $17.36 following the coverage initiation.
January 30, 2024 | 3:13 pm
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Applied Optoelectronics is projected to experience substantial growth in AI optical technology, with a potential 10%+ market share in a $7.5 billion market by 2025. Analyst Mike Genovese has given a Buy rating and a $23 price target, with shares already responding positively.
The bullish analyst report from Rosenblatt Securities is a strong positive signal for Applied Optoelectronics, suggesting significant revenue growth and market share capture in the AI optical tech sector. The report's optimistic revenue forecast and the potential for gross margin expansion are likely to be viewed favorably by investors, contributing to a positive short-term impact on the stock price. The recent price action, with shares up 8.2%, reflects the market's initial reaction to the analyst's coverage.
CONFIDENCE 85
IMPORTANCE 90
RELEVANCE 100