Shares of fiber-optic access network products provider Applied Optoelectronics (NASDAQ:AAOI) are soaring higher today after it agreed to provide design services and assembly services to tech giant Microsoft (NASDAQ:MSFT).
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The agreement is for an initial period of five years and will be renewed automatically unless terminated. Further, Applied will set up the supply chain for the manufacturing, assembly, and shipment of goods. It will also maintain a production line for the purpose of production of these goods and to cover a three-year warranty period.
In another development, earlier this week, Applied also announced the appointment of Steve Pederson as the AVP of its newly set up Broadband Access division.
Northland Securities’ Tim Savageaux, the only analyst tracking AAOI, has reiterated a Buy rating on the stock alongside a $7 price target. This points to a massive 68% potential upside in AAOI on top of a 115% price surge over the past year.
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