Applied Optoelectronics Is Down 60%. Is the Selloff a Buying Opportunity?

Applied Optoelectronics Inc. (NASDAQ:AAOI) has had a rough few days. Shares fell about 14% on October 8, about 7% on October 12, and another 9% to 12% on October 14, to the high $80s. The selloff hit the whole optical group, starting with profit-taking after big gains, and deepened on warnings from Intel and Broadcom about AI funding constraints. AAOI also completed a $600 million stock sale on October 5 at an average price of about $105 per share, so the stock now trades below the average sale price. The stock now trades more than 60% below its 52-week high of $233.67, though it's still up sharply this year, no surprise for a stock that took the top spot in our Top 10 Co-Packaged Optics (CPO) Stocks to Buy in 2026 list.