On the Road with Management…

Research evidence excerpt

On the Road with Management…

Telecom and Networking Equipment

Communications Technology - Market Overweight

APPLIED OPTOELECTRONICS, INC. (AAOI) June 17, 2026

On the Road with Management… Rating:

Peer Perform

The Wolfe Byte Price: $170.81

We agree their US-based manufacturing position is very attractive to Hyper-Scaler Price Target:

customers. For these customers, the US is the lowest-risk manufacturing location NA

in the world. Ability to scale and execution remain open questions for investors. View AAOI Model

Peer Perform. View Comp Table

Company Information

On the Road with AOI… Last week, we spent time with CFO (and Chief Strategy 52-Week Range $17 - $223

Market Cap. (MM) $13,706

Officer) Stefan Murry and Lindsay Savarese (IR). The meetings offered a great chance Enterprise Value (MM) $12,809

to get caught up on industry trends and AOI’s efforts to ramp the business. Shares Out. (MM) 80.2

Avg. Value Traded (MM) $2,747.38

Nothing Wrong with Demand… Demand remains exceptional. Of course, the Adj. Debt to Cap 1.8%

company is guiding for a massive ramp in the transceiver business from $81M in Q1’26 SI% of Float 13.3% FCF Yield (4.9)%

to a $1.4B quarterly run rate by mid-2027. They noted that each of their three Hyper- EV/ EBITDA 31.8x

scaler customers would take 100% of their supply if they could. Transceiver pricing Price to Earnings 26x

is stable for 800G and 1.6T. They’ve been able to raise pricing on their older 100G

products. Market demand remains very asymmetric versus supply. 250

CPO is the Next Big Opportunity… The next leg up on the market will be CPO –

where AAOI will supply ELSFPs into Scale Up switching applications. Using their InP

technology expertise, they expect to manufacture very high quality (and narrow line 100