Applied Optoelectronics downgraded to Neutral from Buy at B. Riley

B. Riley downgraded Applied Optoelectronics (AAOI) to Neutral from Buy with a price target of $16, down from $22. The company provided a “surprisingly weak” Q1 outlook, the analyst tells investors in a research note. Considering Nvidia’s )NVDA) comments about artificial intelligence reaching the tipping point, the firm was “surprised and disappointed” to hear that Microsoft has yet to meaningfully step up in terms of 400G active optical cable procurement. At this point, there seems to be more questions than answers regarding Microsoft’s relationship with Applied Optoelectronics, contends Riley.