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AAOI vs LITE
Which Stock Would AI Choose? Applied Optoelectronics (AAOI) vs. Lumentum Holdings (LITE) Stock Comparison
Key Takeaways
- AAOI has delivered explosive YTD gains of over 400%, outpacing LITE's strong 170% rise, driven by AI data center demand for optical components.
- LITE boasts a larger market cap (~$71B vs. $14B for AAOI) and profitability, with recent Q3 revenue up 90% YoY to $808M and positive EPS.
- Both stocks exhibit high volatility, with AAOI's beta at 3.76 compared to LITE's 1.53, reflecting AAOI's sharper momentum swings in recent market activity.
- Recent catalysts include AAOI's Texas grant and capacity expansion for AI transceivers, while LITE benefits from broad photonic product demand in cloud networking.
- AAOI remains unprofitable (negative EPS), contrasting LITE's improving margins and optimistic Q4 guidance amid AI infrastructure growth.
- Relative performance highlights AAOI's superior short-term momentum, but LITE offers greater scale and stability in the optics sector.
Introduction
Applied Optoelectronics (AAOI) and Lumentum Holdings (LITE) operate in the high-growth optical and photonic components sector, powering AI data centers, cloud infrastructure, and telecom networks. This stock comparison analyzes their business models, recent performance, and market positioning amid surging demand for fiber-optic networking products. Traders seeking momentum plays may eye AAOI's rapid gains, while long-term investors could favor LITE's scale and profitability. Understanding their relative strengths aids decisions in this volatile, AI-driven market environment, where bandwidth needs continue to escalate.
AAOI Overview and Recent Performance
Applied Optoelectronics, Inc. (AAOI) designs, manufactures, and sells fiber-optic networking products, including lasers, transceivers, and modules for internet data centers, cable TV broadband, and telecom. Headquartered in Sugar Land, Texas, the company has expanded capacity to 900,000 square feet in the Houston area to meet AI-driven demand. In recent market activity, AAOI shares have surged over 400% YTD and more than 1,100% over the past year, with monthly gains exceeding 120% in some periods. This momentum stems from new orders for 800G data center transceivers, a $20.9M Texas Semiconductor Innovation Fund grant, and investor conferences highlighting AI growth. Sentiment has shifted positively on expanding manufacturing and revenue guidance of $150-165M for Q1 2026 (up ~57% YoY), though volatility persists with a beta of 3.76 and ongoing losses (EPS -$0.63).
LITE Overview and Recent Performance
Lumentum Holdings Inc. (LITE) is a leading provider of optical and photonic products, operating in Cloud & Networking (for AI data centers and telecom) and Industrial Tech (lasers for manufacturing). Based in San Jose, California, it serves cloud operators and equipment makers globally. Recent weeks have seen LITE stock rise about 170% YTD and over 1,400% annually, hitting all-time highs near $1,021. Fiscal Q3 results drove much of this, with revenue jumping 90% YoY to $808.4M and adjusted EPS of $2.37 beating estimates, alongside Q4 guidance above consensus. Analyst upgrades, including Stifel's $1,100 target, reflect AI/ML infrastructure tailwinds. However, post-earnings dips occurred due to debt concerns (debt/equity 392%), with a beta of 1.53 indicating moderate volatility relative to peers.
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Head-to-Head Comparison
Both AAOI and LITE thrive on AI data center optics demand, but differ in scale and stability. LITE's broader portfolio spans cloud subsystems and industrial lasers, generating $2.11B revenue vs. AAOI's $456M, with positive net income ($252M) and ROE (29%). AAOI focuses narrower on fiber-optic transceivers, fueling higher momentum (YTD +400% vs. +170%) but losses and negative free cash flow. Risk profiles contrast: AAOI's higher beta signals greater swings, while LITE's debt load poses leverage risks despite cash reserves ($1.16B vs. $206M). Sector exposure aligns in telecom equipment, but LITE's diversified end-markets offer resilience. Market sentiment favors AAOI for short-term catalysts like grants, while LITE leads in analyst targets and earnings consistency, highlighting a growth-vs.-scale trade-off.
Tickeron AI Verdict
Tickeron’s AI models currently lean toward AAOI for traders prioritizing momentum, given its superior recent trend consistency (+120% monthly surges) and AI transceiver catalysts amid data center buildouts. However, LITE edges for stability-focused investors, with proven profitability, 90% revenue growth, and relative positioning in a larger-scale operation. Observable factors like AAOI's volatility suggest higher reward potential but elevated drawdowns, while LITE's guidance implies sustained upside probability in the optics rally.
Disclaimer
The information on this webpage is provided for general informational and educational purposes only and is not intended as investment advice, a recommendation to purchase or sell any security, or an offer or solicitation related to investments. It does not consider your personal financial situation, goals, or risk profile, and all investing carries inherent risks, including the possibility of losing your entire investment. For more details, please review our full Disclaimers and Limitations.
To compare these two companies we present long-term analysis, their fundamental ratings and make comparative short-term technical analysis which are presented below. The conclusion is AAOI is a StrongBuy and LITE is a Hold.
Long-Term Analysis
It is best to consider a long-term outlook for a ticker by using Fundamental Analysis (FA) ratings. The rating of 1 to 100, where 1 is best and 100 is worst, is divided into thirds. The first third (a green rating of 1-33) indicates that the ticker is undervalued; the second third (a grey number between 34 and 66) means that the ticker is valued fairly; and the last third (red number of 67 to 100) reflects that the ticker is undervalued. We use an FA Score to show how many ratings show the ticker to be undervalued (green) or overvalued (red).
AAOI’s FA Score shows that 2 FA rating(s) are green whileLITE’s FA Score has 1 green FA rating(s).
- AAOI’s FA Score: 2 green, 3 red.
- LITE’s FA Score: 1 green, 4 red.
Short-Term Analysis
It is best to consider a short-term outlook for a ticker by using Technical Analysis (TA) indicators. We use Odds of Success as the percentage of outcomes which confirm successful trade signals in the past.
If the Odds of Success (the likelihood of the continuation of a trend) for each indicator are greater than 50%, then the generated signal is confirmed. A green percentage from 90% to 51% indicates that the ticker is in a bullish trend. A red percentage from 90% - 51% indicates that the ticker is in a bearish trend. All grey percentages are below 50% and are considered not to confirm the trend signal.
AAOI’s TA Score shows that 2 TA indicator(s) are bullish while LITE’s TA Score has 3 bullish TA indicator(s).
- AAOI’s TA Score: 2 bullish, 6 bearish.
- LITE’s TA Score: 3 bullish, 4 bearish.
Price Growth
AAOI (@Telecommunications Equipment) experienced а -9.00% price change this week, while LITE (@Telecommunications Equipment) price change was -10.31% for the same time period.
The average weekly price growth across all stocks in the @Telecommunications Equipment industry was +1.75%. For the same industry, the average monthly price growth was +16.35%, and the average quarterly price growth was +72.74%.
Reported Earning Dates
AAOI is expected to report earnings on Jul 30, 2026.
LITE is expected to report earnings on Aug 18, 2026.
Industries' Descriptions
@Telecommunications Equipment (+1.75% weekly)The Telecommunications Equipment industry produces voice and data communications equipment, which includes fiber optic delivery products, digital signal processors, high-speed voice, data and video delivery. Additionally, satellite systems, global positioning systems, wireless data systems, personal communications equipment, telephone handsets and payload equipment for satellites also fall into this category. Apple Inc., QUALCOMM Incorporated and Nokia are major global players in this segment.
| AAOI | LITE | AAOI / LITE | |
| Capitalization | 13.7B | 69.2B | 20% |
| EBITDA | -16.14M | 552M | -3% |
| Gain YTD | 391.480 | 141.485 | 277% |
| P/E Ratio | N/A | 156.71 | - |
| Revenue | 507M | 2.49B | 20% |
| Total Cash | 440M | 3.17B | 14% |
| Total Debt | 280M | 3.31B | 8% |
AAOI | LITE | ||
|---|---|---|---|
OUTLOOK RATING 1..100 | 73 | 76 | |
VALUATION overvalued / fair valued / undervalued 1..100 | 65 Fair valued | 87 Overvalued | |
PROFIT vs RISK RATING 1..100 | 10 | 8 | |
SMR RATING 1..100 | 92 | 42 | |
PRICE GROWTH RATING 1..100 | 34 | 34 | |
P/E GROWTH RATING 1..100 | 6 | 94 | |
SEASONALITY SCORE 1..100 | n/a | 50 |
Tickeron ratings are formulated such that a rating of 1 designates the most successful stocks in a given industry, while a rating of 100 points to the least successful stocks for that industry.
AAOI's Valuation (65) in the Telecommunications Equipment industry is in the same range as LITE (87). This means that AAOI’s stock grew similarly to LITE’s over the last 12 months.
LITE's Profit vs Risk Rating (8) in the Telecommunications Equipment industry is in the same range as AAOI (10). This means that LITE’s stock grew similarly to AAOI’s over the last 12 months.
LITE's SMR Rating (42) in the Telecommunications Equipment industry is somewhat better than the same rating for AAOI (92). This means that LITE’s stock grew somewhat faster than AAOI’s over the last 12 months.
LITE's Price Growth Rating (34) in the Telecommunications Equipment industry is in the same range as AAOI (34). This means that LITE’s stock grew similarly to AAOI’s over the last 12 months.
AAOI's P/E Growth Rating (6) in the Telecommunications Equipment industry is significantly better than the same rating for LITE (94). This means that AAOI’s stock grew significantly faster than LITE’s over the last 12 months.
| AAOI | LITE | |
|---|---|---|
| RSI ODDS (%) | 1 day ago 83% | N/A |
| Stochastic ODDS (%) | 1 day ago 84% | 1 day ago 68% |
| Momentum ODDS (%) | 1 day ago 90% | 1 day ago 76% |
| MACD ODDS (%) | 1 day ago 90% | 1 day ago 70% |
| TrendWeek ODDS (%) | 1 day ago 85% | 1 day ago 75% |
| TrendMonth ODDS (%) | 1 day ago 88% | 1 day ago 79% |
| Advances ODDS (%) | 8 days ago 86% | 10 days ago 80% |
| Declines ODDS (%) | 1 day ago 87% | 3 days ago 74% |
| BollingerBands ODDS (%) | 1 day ago 84% | 1 day ago 70% |
| Aroon ODDS (%) | 1 day ago 90% | 1 day ago 79% |
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AAOI and
Correlation & Price change
A.I.dvisor indicates that over the last year, AAOI has been loosely correlated with LITE. These tickers have moved in lockstep 56% of the time. This A.I.-generated data suggests there is some statistical probability that if AAOI jumps, then LITE could also see price increases.
| Ticker / NAME | Correlation To AAOI | 1D Price Change % | ||
|---|---|---|---|---|
| AAOI | 100% | -1.11% | ||
| LITE - AAOI | 56% Loosely correlated | +0.58% | ||
| CIEN - AAOI | 53% Loosely correlated | +3.32% | ||
| LASR - AAOI | 47% Loosely correlated | -1.89% | ||
| NVDA - AAOI | 45% Loosely correlated | -0.77% | ||
| MPWR - AAOI | 44% Loosely correlated | -1.23% | ||
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LITE and
Correlation & Price change
A.I.dvisor indicates that over the last year, LITE has been loosely correlated with CIEN. These tickers have moved in lockstep 64% of the time. This A.I.-generated data suggests there is some statistical probability that if LITE jumps, then CIEN could also see price increases.
| Ticker / NAME | Correlation To LITE | 1D Price Change % | ||
|---|---|---|---|---|
| LITE | 100% | +0.58% | ||
| CIEN - LITE | 64% Loosely correlated | +3.32% | ||
| AAOI - LITE | 56% Loosely correlated | -1.11% | ||
| VIAV - LITE | 52% Loosely correlated | -0.94% | ||
| ITRN - LITE | 42% Loosely correlated | -1.64% | ||
| KN - LITE | 35% Loosely correlated | -1.39% | ||
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