Applied Optoelectronics (AAOI) stock soared 5.06% during the night session on Sunday, marking a significant upward movement for the optical networking equipment manufacturer.

The rally in AAOI shares was part of a broader surge in optical communication stocks following news that the U.S. and Iran reached a peace deal and agreed to reopen the Strait of Hormuz. This geopolitical development triggered positive sentiment across technology sectors, with optical communication companies particularly benefiting from the improved market outlook.

Other optical communication stocks also experienced gains in overnight trading, indicating sector-wide optimism driven by the reduced geopolitical tensions and their potential positive impact on global trade and technology infrastructure investments.