On June 5, Applied Optoelectronics declined 5.23% overnight, trading at $192.66/share, with trading volume of $2.5192 million. The stock continued its pullback following a sharp rally earlier in the week.

On the news front, AAOI had previously surged over 15% across two consecutive trading days after prominent investor Serenity publicly endorsed the company, calling it the next SanDisk, while the companys New Taipei factory secured production approval from a hyperscale customer for its 800G optical module capacity. The rapid appreciation created significant short-term profit-taking pressure, which has driven the ongoing correction. Meanwhile, the broader Communication Equipment sector experienced widespread weakness, with Nokia falling 4.63%, Ciena down 3.63%, Lumentum declining 3.43%, and Arista Networks dropping 1.40%, further dragging on sentiment. Additionally, the companys Q1 EPS loss of $0.12 missed market expectations, and a $600 million ATM equity offering plan continues to be viewed as a near-term overhang on shares.

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