Applied Optoelectronics' stock plummeted 5.17% during intraday trading on Thursday.

The sharp decline follows a recent SemiAnalysis report that suggested mass production of co-packaged optics (CPO) could be delayed until 2028 or even 2029 due to challenging system-level yields as low as 19.4%. This news has cast a shadow over the broader optical communication sector, impacting related companies.

Despite a brief pre-market rebound fueled by a record equipment order, investor sentiment turned negative during the regular session as concerns about the timeline for critical photonic technology adoption in AI data centers outweighed short-term positive developments.