AAOX

$Applied Optoelectronics(AAOI.US) Yesterday's CPI cooling led to a risk-on sentiment in the broader market. However, AAOI surged +12% in a single day, significantly outperforming the sector, indicating it has its own merits. On the news front, AAOI is expanding production of 800G optical modules, targeting the demand for AI optical interconnects. On the same day, TSMC's June revenue hit a record high with +68% growth and announced price increases for advanced processes. Morgan Stanley also issued a CPO report highlighting optical module lasers—the demand logic for the AI optical chain is being repeatedly validated.

Last week, South Korea's deleveraging indiscriminately hammered the entire optical chain, with AAOI once pushed below 110. However, the fundamentals remain intact, and revenue is still growing rapidly. This mispricing creates room for a rebound. Therefore, yesterday's bullish candlestick is a combination of three factors: the tangible substance of its own capacity expansion + the overarching logic of the AI optical chain + an oversold bounce, not merely riding on the CPI coattails.