Applied Optoelectronics Inc. (NASDAQ:AAOI) stock surged more than 9% Tuesday as fiber-optic stocks rallied following a major supply deal between Corning Inc. (NYSE:GLW) and Verizon Communications Inc. (NYSE:VZ).
The move outpaced 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 multiyear, multibillion-dollar supply agreement Tuesday covering optical fiber and connectivity products.
The deal appears to be lifting sentiment across the fiber-optic industry, with Applied Optoelectronics benefiting from renewed investor interest in companies exposed to expanding fiber infrastructure demand.
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Technical Analysis
Despite Tuesday’s rally, AAOI remains below some key moving averages. The stock is 5.4% below its 20-day simple moving average of $120.16 and 3% below its 50-day SMA of $117.20.
However, shares remain 11.5% above the 200-day SMA of $101.98. The relative strength index stands at 48.87, indicating neutral momentum.
The $117-$120 range could serve as near-term resistance. Meanwhile, the 200-day SMA near $102 provides a key support area.
Applied Optoelectronics Analyst Outlook
The stock has a Buy consensus rating and an average price forecast of $205.
Rosenblatt maintained a Buy rating and a $220 price forecast on Aug. 7. Needham maintained its Buy rating but lowered its forecast to $190 from $220 the same day.
Benzinga Edge Rankings
Applied Optoelectronics has a Benzinga Edge Momentum score of 98.16, reflecting strong relative price performance. Investors can track additional metrics through the Benzinga Edge scorecard.
Applied Optoelectronics ETF Exposure
AAOI is held by the Invesco Dorsey Wright Technology Momentum ETF (NASDAQ:PTF), Strive Small-Cap ETF (NYSE:STXK) and Golden Eagle Dynamic Hypergrowth ETF (NASDAQ:HYP).
AAOI Price Action
Applied Optoelectronics shares were up 9.19% at $115.23 at the time of publication Tuesday, according to Benzinga Pro data.
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