Applied Optoelectronics (AAOI) shares surged 8.00% during Monday's intraday session, extending a rally that began in pre-market trading following a series of highly positive catalysts.

The sharp upward move was initially triggered by the company's announcement that a U.S. court had approved a preliminary injunction motion, shielding AAOI from adverse impacts while it challenges a designation under the so-called 1260H list. This legal victory is seen as a crucial step in removing a significant regulatory overhang that had weighed on investor sentiment.

Further fueling the rally were the company's exceptional second-quarter results, reported last week. Revenue reached $191.9 million, an 86% year-over-year increase that beat analyst expectations, while data center revenue surged approximately 140% to surpass $100 million for the first time. Management also highlighted that 800G product revenue grew more than tenfold year-over-year and projected nearly five-fold sequential growth in the third quarter, with overall customer demand exceeding supply capacity by 20% to 40%—a gap expected to persist through mid-2027.