Applied Optoelectronics (AAOI) saw its stock price surge 8.25% during Tuesday's intraday session, marking a significant upward movement for the optical networking component maker.

The rally appears driven by bullish commentary from a prominent investor and positive developments in the company's production capacity. Investor Serenity publicly stated that AAOI is their most favored US photonics stock, suggesting it could be "the next SanDisk." Serenity highlighted that photonics companies, including Applied Optoelectronics, are approaching a revenue acceleration inflection point expected around the first half of next year, with the industry currently in a capacity-building phase.

Fundamentally, the company's Xinbei factory has reportedly received production approval from a hyperscale customer for its 800G optical module capacity. This development comes amid surging AI data center demand for high-speed optical interconnect solutions. The company projects its year-end monthly capacity to exceed 100,000 units, positioning it to capitalize on the growing market demand.