Applied Optoelectronics price target lowered to $16 from $20 at Rosenblatt

Rosenblatt analyst Mike Genovese lowered the firm’s price target on Applied Optoelectronics (AAOI) to $16 from $20 and keeps a Buy rating on the shares. Q1 revenues and Q2 revenue guidance were “disappointing” due to slower initial ramp of Microsoft (MSFT) 400G orders and slower start to the DOCSIS 4.0 amplifier cycle, the analyst tells investors. However, given significantly expanding customer activity for 400G, 800G, and 1.6T transceivers for Hyper Scale Data Center operators and technology suppliers, the outlook for the second half and 2025 has improved, the analyst added. While the firm is trimming its price target it contends that its “new 2H24 estimates look conservative, as do our 2025 estimates that we are raising.”