Applied Optoelectronics (AAOI) shares surged 6.52% in intraday trading, extending a recent rally fueled by favorable policy developments and upbeat earnings expectations.

The move came as the United States is reportedly drafting an import ban on Chinese data center equipment, a move that would directly benefit domestic optical communication providers like Applied Optoelectronics. The stock also gained momentum ahead of its quarterly earnings release, with consensus estimates calling for roughly 80% year-over-year revenue growth and bullish institutional sentiment dominating coverage.