{"date":"2026-09-02T00:00","headerImageUrl":"https://structuredproducts-ch.leonteq.com/product-news/product-homepage-banner/Applied%20Optoelectronics_Leonteq-Structured-Products_Product%20Homepage%20Banner.jpg","subTitle":"An AI Beneficiary from the Second Tier","windowTitle":"Applied Optoelectronics","category":"underlying-in-focus","title":"Applied Optoelectronics","body":"<p>Investors do not like hearing the word \u201cdilution\u201d. The term is used when a company issues new shares. As the total number of shares outstanding increases, existing shares are diluted. Against this backdrop, the recent decline in the share price of Applied Optoelectronics Inc. (AOI) comes as no surprise. On Friday, August 21, the company filed documents with the US Securities and Exchange Commission (SEC) for the sale of shares worth up to USD 600 million in total. Two brokers are expected to place the shares on the market. AOI intends to use the proceeds to repay debt, fund investments and acquisitions, or for similar purposes. When Wall Street returned from the weekend, it reacted unfavourably: AOI plunged by as much as 18% on Monday, August 24.<\/p>\n\n<div><generic-chart title=\"Applied Optoelectronics (in USD)\"> \n    <chart-line title=\"Applied Optoelectronics\" path=\"Chart_AAOINEW.csv\" format=\"date, number\"><\/chart-line> \n    <x-axis type=\"datetime\"><\/x-axis> <\/generic-chart><\/div>\n<footer>Source: Refinitiv, as of: 01.09.2026<br />Historical data is not a reliable indicator of future performance.<\/footer>\n\n<h3>Small Components, Strong Demand<\/h3>\n<p>The performance over the first eight months of 2026 is nevertheless impressive. AOI is trading more than 200% above last year\u2019s closing price. This rally is directly linked to the core expertise of the Texas-based group: AOI develops and manufactures optical transceivers, lasers and memory products. These components have long been used by cable network operators and telecommunications companies. More recently, they have increasingly been used for internet-based data transmission. This applies to both cloud computing and data centres. US technology giants Microsoft and Oracle are among the company\u2019s largest customers. AOI is therefore fully exposed to the megatrend of artificial intelligence (AI). A look at the figures reported by the Nasdaq-listed company supports this thesis. Most recently, AOI posted record revenue for four consecutive quarters.<\/p>\n\n<h3>Persistent Production Bottlenecks<\/h3>\n<p>Between April and June 2026, revenue amounted to USD 191.9 million, up 86% from the same period a year earlier. The data centre business more than doubled. In the first half of 2026, this business segment accounted for more than half of total revenue. Its share had therefore increased by nearly 20 percentage points compared with the first six months of 2025. According to the company, AOI benefited from the ramp-up of its new 800-gigabit transceivers. At the same time, 1.6-terabit solutions are becoming increasingly important. \u201cWe expect demand to continue to exceed our production capacity through mid-2027,\u201d CEO Thompson Lin explains. At the same time, AOI\u2019s founder considers the company\u2019s long-term growth drivers to remain intact: \u201cWe are uniquely positioned as an important supplier to the AI, cloud and cable television markets.\u201d<\/p>\n\n\n<h3>Interesting Investment Alternatives<\/h3>\n<p>The top executive emphasises that, on a non-GAAP basis, his company achieved a turnaround in the most recent quarter. However, this accounting measure excludes factors considered not to be decisive for the company\u2019s overall operating performance. These include share-based employee compensation. On an unadjusted GAAP basis, AOI remains in the red. At USD 22.8 million, the loss in the second quarter actually increased compared with the same period a year earlier. For investors who are reluctant to invest directly because of this fact and/or the potential dilution, Leonteq has an alternative: the Callable Reverse Convertible. With this structure, the coupon is guaranteed. Provided the underlying asset is trading at or above the strike price at maturity, the issuer repays the full nominal amount. The relevant barrier is set at a low 50% of the initial level. Should AOI fall by more than half over the next twelve months, repayment would be directly linked to the performance of the underlying asset.<\/p>\n\n<p>The technology stock has recently joined the broad range of underlying assets available for Leonteq\u2019s leveraged products. The Zurich-based fintech has initially launched a handful of mini-futures on AOI, including both long and short variants.<\/p>\n\n<h3>Callable Barrier Reverse Convertible<\/h3>\n<div>  \n    \n    <SavedSearch :allProducts=\"false\" :filter=\"{&quot;partner&quot;:&quot;LEONTEQ&quot;,&quot;currencies&quot;:[],&quot;issuers&quot;:[],&quot;productCategories&quot;:[],&quot;productGroups&quot;:[],&quot;productTypes&quot;:[],&quot;maturityRangeKey&quot;:[],&quot;distanceToBarriers&quot;:[],&quot;barrierLevelRanges&quot;:[],&quot;strikeLevelRanges&quot;:[],&quot;underlyings&quot;:[],&quot;omni&quot;:&quot;\\&quot;CH1593779668\\&quot;\\&quot;CH1593779676\\&quot;&quot;,&quot;conditions&quot;:{&quot;+snapshot.product.secondary_market:true&quot;:false,&quot;+snapshot.product.attributes.extended_trading_hours:true&quot;:false,&quot;&quot;:true,&quot;+snapshot.product.in_subscription:(\\&quot;LEONTEQ\\&quot;)&quot;:false,&quot;-_exists_:snapshot.product.in_subscription&quot;:false},&quot;marketVenues&quot;:[],&quot;assetClasses&quot;:[],&quot;barrierTypes&quot;:[],&quot;countrySpecificTitles&quot;:[],&quot;couponFrequencies&quot;:[],&quot;sortFields&quot;:[{&quot;fieldName&quot;:&quot;snapshot.product.investment.investment_currency&quot;,&quot;sortOrder&quot;:&quot;ASC&quot;}],&quot;displayColumns&quot;:[&quot;coupon&quot;,&quot;underlying&quot;,&quot;barrierPercentage&quot;,&quot;currency&quot;,&quot;lastTradingDate&quot;,&quot;tenor&quot;,&quot;bidAsk&quot;,&quot;subscriptionEndDate&quot;,&quot;valor&quot;,&quot;documentLinks&quot;]}\">\n                <\/SavedSearch>\n  <\/div>\n\n<h3>Leverage products on Applied Optoelectronics:<\/h3>\n    <div>  \n        \n                                                                                                                                                                                                                                                                            \n            <leverage-saved-search :columns=\"[ 'engine.isin', 'engine.valor', 'Type', 'Direction', 'engine.underlying', 'engine.currency-abbr', 'Strike', 'Leverage', 'Ratio', 'engine.maturity', 'Bid', 'Ask']\" :filter=\"{&quot;conditions&quot;:{&quot;+_exists_:price.ask +price.state:(\\&quot;OPEN\\&quot;, \\&quot;CLOSED\\&quot;)&quot;:false,&quot;+_exists_:levels.stopLossLevelAbs&quot;:false,&quot;+priceIndication.extendedTradingHours:true&quot;:false},&quot;underlyings&quot;:[&quot;100639927&quot;],&quot;searchable&quot;:true}\" />\n  <\/div>\n    \n<div>\n    <ltq-button color=\"primary\" url=\"https://structuredproducts-ch.leonteq.com/leverage/0Rr?language_id=1\" label=\"Discover more leverage prodcuts!\"><\/ltq-button><\/div>\n<div>      <p>We look forward to answering all of your questions about our products and how they are traded. Please don't hesitate to get in touch! Phone: <a href=\"tel:+41588001111\">058 800 11 11<\/a>, email <a href=\"mailto:info@leonteq.com\">info@leonteq.com<\/a> or <a href=\"/contact\" title=\"Contact\">contact us here<\/a>.\n<\/p>\n  <\/div>","url":"underlying-applied-optoelectronics","investmentThemeVerticalImageUrl":"https://structuredproducts-ch.leonteq.com/product-news/sidenav-banner/Applied%20Optoelectronics_Leonteq-Structured-Products_Sidenav%20Banner.jpg","thumbnailUrl":"https://structuredproducts-ch.leonteq.com/product-news/thumbnail/Applied%20Optoelectronics_Leonteq-Structured-Products_Thumbnail.jpg"}