Applied Optoelectronics Says It Could Sell More—If It Could Make More

Applied Optoelectronics Inc. (NASDAQ: AAOI ) shares surged in premarket trading Friday after the company reported second-quarter results that topped Wall Street estimates, issued strong third-quarter guidance and said demand for its AI networking products is expected to outpace production capacity through mid-2027. During the earnings call, management said Applied Optoelectronics could generate even more revenue if it had enough manufacturing capacity to meet customer demand. Executives said demand for AI networking products remains so strong that near-term sales are “bounded almost entirely by production capacity and key component availability,” adding that forecast demand is expected to exceed production capacity through mid-2027. The company also reiterated that its projected 2026 revenue of about $1.1 billion is constrained by supply and manufacturing capacity, not by...