Optical communication stocks jumped. Applied Optoelectronics soared 39% on strong Q4 earnings beat; Lumentum up over 2%; Coherent, Corning up over 1%.

Applied Optoelectronics stock surged on a combination of better-than-expected fourth-quarter financial results, strong first-quarter revenue guidance, and a wave of positive analyst actions.

The company reported a Q4 adjusted loss per share of $0.01, significantly beating the consensus estimate of a $0.11 loss. Revenue of $134.3 million also exceeded expectations, marking a 33.9% increase year-over-year. The strong performance was attributed to robust demand in its CATV and datacenter segments, with the company highlighting growth tied to new data center construction and AI-related upgrades.

Adding to the positive momentum, the company issued first-quarter revenue guidance above analyst estimates. Furthermore, several analyst firms upgraded their ratings and raised price targets substantially. Key actions included B. Riley upgrading the stock to Neutral from Sell and raising its target to $54 from $15, Rosenblatt Securities raising its target to $125 from $50, Needham raising its target to $80 from $43, and Raymond James raising its target to $85 from $30.