Applied Optoelectronics (AAOI) saw its shares plunge 5.03% in pre-market trading on Friday, extending a recent pullback.
The decline follows a sharp two-day rally of over 15% that was driven by positive catalysts including a public endorsement from investor Serenity and news that the company's New Taipei factory secured production approval for 800G optical modules from a major hyperscale customer. Significant short-term profit-taking has emerged following that rally.
Broader concerns are also weighing on the stock. The company reported a Q1 loss per share of $0.12, missing market expectations, and its plan for a $600 million at-the-market equity offering continues to pressure investor sentiment. Furthermore, the optical communication equipment sector showed broad weakness intraday, with peers like Lumentum and Nokia also trading lower, adding to the downward pressure on AAOI.