--- title: "AAOI Earnings Soar, Lifting the Entire Optical Communications Sector" type: "News" locale: "en" url: "https://longbridge.com/en/news/295288155.md" description: "AAOI's Q2 revenue rose 86% year-over-year to $191.9 million, with its data center business surpassing the $100 million mark for the first time, driving a collective surge in optical communication stocks such as Coherent, Lumentum, and Corning. Analysts believe AAOI's better-than-expected performance serves as a positive indicator for Lumentum and Coherent, which are also deeply invested in AI data center optical interconnects—both companies are scheduled to report earnings next week" datetime: "2026-08-08T01:53:18.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/295288155.md) - [en](https://longbridge.com/en/news/295288155.md) - [zh-HK](https://longbridge.com/zh-HK/news/295288155.md) --- # AAOI Earnings Soar, Lifting the Entire Optical Communications Sector A better-than-expected earnings report from U.S. optical module manufacturer Applied Optoelectronics ignited the entire optical communications sector on Friday. The latest earnings report shows that AAOI's Q2 revenue increased by 86% year-over-year to $191.9 million, with its data center business breaking through the $100 million threshold for the first time. Non-GAAP earnings per share were $0.06, exceeding the upper end of the previous guidance range. The company simultaneously provided Q3 revenue guidance of $255 million to $290 million and maintained its full-year target of approximately $1.1 billion. The news boosted market sentiment, with Coherent surging 13% on the day, while Lumentum and Corning rose 6% and 5%, respectively. AAOI's own stock price also climbed 9%. The strong performance was interpreted by the market as a positive signal for the entire optical communications track. Analysts believe that **AAOI's better-than-expected performance serves as a positive indicator for Lumentum and Coherent, which are also deeply invested in AI data center optical interconnects—both companies are scheduled to report earnings next week**, and both are backed by NVIDIA's equity holdings. Analysts expect both companies to continue recording dual growth in revenue and profit against the backdrop of robust AI demand. Optical transceivers are core components of data center fiber optic transmission networks, with Coherent, Applied Optoelectronics, Lumentum, and Corning all playing key roles in this industrial chain. **As investment in AI infrastructure continues to expand, these companies are viewed by the market as "picks and shovels" beneficiaries of the computing power construction wave.** Additionally, Caijing Magazine reported on August 5 that, according to media reports on August 4, insiders revealed that the U.S. Federal Communications Commission (FCC) is drafting new regulations planned to prohibit the import of new optical modules produced in China. However, institutions believe that this policy will be difficult to implement, and even if implemented, the impact would be limited. Brokerages such as CITIC and Guosheng pointed out that the global high-speed optical module market is highly dependent on Chinese manufacturers, and North American demand cannot be decoupled from Chinese production capacity. ## Data Center Business Breaks $100 Million, 800G Becomes New Growth Mainline An article by Wall Street Insights noted that AAOI's earnings report showed its data center business breaking the $100 million threshold for the first time. While the data center business is accelerating its growth, the CATV business remains an important component of AAOI's current revenue structure. Management expects CATV revenue to rise to $100 million–$110 million in the third quarter, with full-year revenue projected to exceed $325 million. Mediacom has selected AAOI as the primary supplier for its DOCSIS 4.0 network upgrade, with relevant products including 1.8GHz smart amplifiers and software solutions. From a product structure perspective, 400G revenue amounted to $48.4 million, a more than fourfold year-over-year increase, remaining a significant pillar of the current data center business. However, **the changes in 800G are more indicative—Q2 800G revenue reached $12.8 million, increasing more than tenfold year-over-year and more than doubling quarter-over-quarter.** Management expects 800G revenue to approach a fivefold quarter-over-quarter growth in the third quarter, indicating that the growth focus of the company's data center products is rapidly shifting from 100G and 400G to higher-speed products. ## Capacity Expansion Nears 10-Fold, Texas Becomes Primary Base Notably, an article by Wall Street Insights stated that **AAOI management explicitly clarified during the conference call that current customer demand exceeds the company's supply capacity by approximately 20% to 40%, meaning demand is no longer a bottleneck for growth. The core variables constraining revenue ramp-up have shifted to capacity construction progress, supply security for key components, and the pace of customer certification for 1.6T products.** **This was the core data point that attracted the most market attention during the conference call.** CFO Stefan Murry provided three clear timelines: current monthly capacity for 800G and 1.6T products is approaching 200,000 units, higher than the approximately 100,000 units at the end of Q1; by the end of 2026, monthly capacity will exceed 650,000 units; and by the end of 2027, monthly capacity will further increase to over 930,000 units, with more than half of the capacity coming from Texas. 1.6T products are another growth pole attracting significant market attention. Chih-Hsiang (Thompson) Lin confirmed during the conference call that AAOI will become the fourth supplier to receive 1.6T certification from a major hyperscale data center customer. Certification is expected to be completed within two to three weeks, with shipments starting in the late third quarter and volume production ramping up in the fourth quarter. Company CEO Chih-Hsiang (Thompson) Lin gave a clear expectation for 1.6T revenue in the fourth quarter: > "We still believe that revenue from 1.6T transceivers in the fourth quarter can exceed $70 million... The first quarter of next year should be much better. I wouldn't be surprised if it doubles." Management also outlined a longer-term path: **By mid-2027, monthly revenue for 100G and 400G products will be approximately $90 million, 800G monthly revenue will be around $217 million, and 1.6T monthly revenue will be about $164 million, bringing the total monthly revenue for data center transceivers to approximately $471 million.** However, the realization of this path depends on the coordinated progress of equipment installation, customer certification, material supply, and manufacturing yield rates. Lin candidly admitted that the supply of key 1.6T components, such as DSPs and TIAs, remains tight, and the main constraint on 1.6T deliveries in the fourth quarter will stem from materials rather than capacity itself. ### Related Stocks - [COHR.US](https://longbridge.com/en/quote/COHR.US.md) - [AAOI.US](https://longbridge.com/en/quote/AAOI.US.md) - [GLW.US](https://longbridge.com/en/quote/GLW.US.md) - [LITE.US](https://longbridge.com/en/quote/LITE.US.md) - [COHX.US](https://longbridge.com/en/quote/COHX.US.md) - [LITU.US](https://longbridge.com/en/quote/LITU.US.md) - [LITX.US](https://longbridge.com/en/quote/LITX.US.md) - [LITZ.US](https://longbridge.com/en/quote/LITZ.US.md) - [AAOX.US](https://longbridge.com/en/quote/AAOX.US.md) - [NVDA.US](https://longbridge.com/en/quote/NVDA.US.md) - [600030.CN](https://longbridge.com/en/quote/600030.CN.md) - [06030.HK](https://longbridge.com/en/quote/06030.HK.md) - [002670.CN](https://longbridge.com/en/quote/002670.CN.md) - [NVD.DE](https://longbridge.com/en/quote/NVD.DE.md) ## Related News & Research - [The Trump administration could soon create the 'mother of all' AI bottlenecks. 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