AAOI Dips 46% in Three Months: Should You Buy the Stock Now or Wait?

AAOI has dropped 46.3% over the past three months, weighed down by production capacity constraints and component supply shortages that have prevented the company from capitalizing on surging AI-driven demand for its 800G and 1.6T optical transceivers.

Management is pushing to expand manufacturing capacity beyond 650,000 units per month by the end of this year. The company projects 800G revenues will hit $217 million monthly by mid-2027, reflecting ongoing appetite for high-speed datacenter interconnects tied to AI infrastructure buildouts.

Despite the growth trajectory, valuation concerns persist alongside competitive pressure from larger rivals in the optical transceiver space. Zacks Investment Research maintains a Rank #3 (Hold) rating on the stock, signaling a wait-and-see stance as the company works through supply-side bottlenecks.