Intro
Management reaffirmed mid-2027 revenue guidance of $471 million per month. That's the most important takeaway. In Q2, AAOI generated gross profit of $53 million (28% margin) and operating income of negative $25 million (-13% margin). As of Friday, August 14th, the market cap is $12.7B and P/S is 15.9x - valuation is driven by data center demand, increased networking demand, and the transition from 800G to 1.6T. Going forward, we want to see revenue increase driven by 800G and 1.6T and gross margins increasing toward the long term guidance of 40%. Management has clearly stated that revenue is limited by their production capacity and supply chain, not market demand, which they believe is much larger.
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For informational purposes only — not investment advice.