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AAOI vs LITE
Which Stock Would AI Choose? Applied Optoelectronics (AAOI) vs. Lumentum Holdings (LITE) Stock Comparison
Key Takeaways
- Both AAOI and LITE operate in the optical networking sector, supplying components critical for AI data center connectivity and high-speed transceivers.
- AAOI has delivered exceptional year-to-date gains exceeding 200% but experienced sharper recent pullbacks amid volatility and customer concentration risks.
- LITE reported robust fiscal Q4 2026 results with revenue more than doubling year over year and provided strong forward guidance, supporting steadier momentum.
- LITE maintains a significantly larger market capitalization and broader product portfolio compared to the smaller, more specialized AAOI.
- Relative performance highlights trade-offs between AAOI’s higher-beta growth profile and LITE’s scale and earnings stability in the current AI-driven environment.
- Sector sentiment remains positive for both due to accelerating demand for 800G and next-generation optical solutions, though execution and valuation multiples differ markedly.
Introduction
Applied Optoelectronics (AAOI) and Lumentum Holdings (LITE) represent two distinct players in the optical components space, where demand for high-speed connectivity in AI infrastructure has driven substantial investor interest. This comparison examines their business models, recent stock behavior, and relative positioning to assist traders and investors evaluating exposure to the AI networking theme. Market participants focused on growth-oriented technology equities or sector rotation within communications equipment may find the analysis particularly relevant for assessing momentum and risk-adjusted opportunities.
AAOI Overview and Recent Performance
Applied Optoelectronics designs and manufactures advanced optical devices, packaged components, laser transmitters, and fiber optic transceivers primarily for data center and cable television applications. In recent market activity, the stock has shown pronounced volatility, climbing sharply earlier in the year on robust 800G transceiver demand before retreating amid broader sector rotations and a dilutive equity offering. Revenue growth has accelerated, with datacenter segments expanding rapidly, yet the company faces elevated customer concentration and negative free cash flow. Sentiment has been influenced by capacity expansion plans and hyperscaler adoption trends, resulting in wide trading ranges over recent weeks.
LITE Overview and Recent Performance
Lumentum Holdings develops optical and photonic technologies, including lasers, modules, and subsystems that support AI data centers, cloud computing, and telecommunications networks. Recent performance reflects strength following fiscal fourth-quarter results that exceeded expectations, with revenue rising over 100% year over year and improved margins. The stock has maintained upward trajectory with more contained drawdowns compared to smaller peers, supported by guidance for continued expansion in optical circuit switching and high-speed transceivers. Market sentiment has benefited from AI infrastructure spending and participation in industry events, contributing to relative resilience in recent trading sessions.
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Head-to-Head Comparison
Applied Optoelectronics operates as a more specialized transceiver manufacturer with direct exposure to hyperscaler 800G ramps, while Lumentum offers a broader portfolio encompassing optical circuit switches and components across multiple end markets. Growth drivers for both center on AI data center bandwidth demand, yet AAOI exhibits higher revenue growth rates alongside greater earnings volatility and customer concentration. Recent momentum favors LITE following its earnings beat and larger scale, which provides relative stability versus AAOI’s sharper price swings. Risk factors include execution on capacity for the smaller firm and integration of new technologies for the larger one. Sector exposure remains similar, though market sentiment has rewarded Lumentum’s demonstrated profitability trajectory more consistently in recent periods.
Tickeron AI Verdict
Based on observable factors including trend consistency, earnings stability, and relative positioning within the AI optics supply chain, Tickeron’s AI would currently assign a probabilistic preference toward LITE. Its larger market presence, recent revenue outperformance, and contained volatility provide a more durable setup compared to AAOI’s higher-beta profile, though both remain sensitive to sustained data center spending cycles.
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 disclaimer.
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 Buy and LITE is a StrongBuy.
AAOI | LITE | ||
|---|---|---|---|
OUTLOOK RATING 1..100 | 26 | 89 | |
VALUATION overvalued / fair valued / undervalued 1..100 | 49 Fair valued | 85 Overvalued | |
PROFIT vs RISK RATING 1..100 | 60 | 21 | |
SMR RATING 1..100 | 92 | 100 | |
PRICE GROWTH RATING 1..100 | 37 | 34 | |
P/E GROWTH RATING 1..100 | 6 | 94 | |
SEASONALITY SCORE 1..100 | 50 | 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 (49) in the Telecommunications Equipment industry is somewhat better than the same rating for LITE (85). This means that AAOI’s stock grew somewhat faster than LITE’s over the last 12 months.
LITE's Profit vs Risk Rating (21) in the Telecommunications Equipment industry is somewhat better than the same rating for AAOI (60). This means that LITE’s stock grew somewhat faster than AAOI’s over the last 12 months.
AAOI's SMR Rating (92) in the Telecommunications Equipment industry is in the same range as LITE (100). This means that AAOI’s stock grew similarly to LITE’s over the last 12 months.
LITE's Price Growth Rating (34) in the Telecommunications Equipment industry is in the same range as AAOI (37). 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 (%) | N/A | N/A |
| Stochastic ODDS (%) | 1 day ago 86% | 1 day ago 77% |
| Momentum ODDS (%) | 1 day ago 84% | 1 day ago 77% |
| MACD ODDS (%) | 1 day ago 89% | 1 day ago 72% |
| TrendWeek ODDS (%) | 1 day ago 86% | 1 day ago 81% |
| TrendMonth ODDS (%) | 1 day ago 87% | 1 day ago 83% |
| Advances ODDS (%) | 10 days ago 87% | 10 days ago 82% |
| Declines ODDS (%) | 7 days ago 86% | 7 days ago 76% |
| BollingerBands ODDS (%) | 1 day ago 90% | 1 day ago 75% |
| Aroon ODDS (%) | 1 day ago 87% | 3 days ago 85% |
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 overvalued. 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 1 FA rating(s) are green while LITE’s FA Score has 1 green FA rating(s).
- AAOI’s FA Score: 1 green, 4 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 5 TA indicator(s) are bullish while LITE’s TA Score has 5 bullish TA indicator(s).
- AAOI’s TA Score: 5 bullish, 3 bearish.
- LITE’s TA Score: 5 bullish, 2 bearish.
Price Growth
AAOI (@Telecommunications Equipment) experienced а -5.92% price change this week, while LITE (@Telecommunications Equipment) price change was +2.94% for the same time period.
The average weekly price growth across all stocks in the @Telecommunications Equipment industry was -0.78%. For the same industry, the average monthly price growth was +0.09%, and the average quarterly price growth was +8.38%.
Reported Earning Dates
AAOI is expected to report earnings on Nov 05, 2026.
LITE is expected to report earnings on Nov 10, 2026.
Industries' Descriptions
@Telecommunications Equipment (-0.78% 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.
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AAOI and
Correlation & Price change
A.I.dvisor indicates that over the last year, AAOI has been closely correlated with LITE. These tickers have moved in lockstep 66% of the time. This A.I.-generated data suggests there is a high statistical probability that if AAOI jumps, then LITE could also see price increases.
| Ticker / NAME | Correlation To AAOI | 1D Price Change % | ||
|---|---|---|---|---|
| AAOI | 100% | +3.98% | ||
| LITE - AAOI | 66% Closely correlated | +5.66% | ||
| CIEN - AAOI | 57% Loosely correlated | +3.12% | ||
| VIAV - AAOI | 53% Loosely correlated | +2.32% | ||
| ADTN - AAOI | 48% Loosely correlated | +1.03% | ||
| LASR - AAOI | 47% Loosely correlated | -1.37% | ||
More | ||||
LITE and
Correlation & Price change
A.I.dvisor indicates that over the last year, LITE has been closely correlated with CIEN. These tickers have moved in lockstep 70% of the time. This A.I.-generated data suggests there is a high statistical probability that if LITE jumps, then CIEN could also see price increases.
| Ticker / NAME | Correlation To LITE | 1D Price Change % | ||
|---|---|---|---|---|
| LITE | 100% | +5.66% | ||
| CIEN - LITE | 70% Closely correlated | +3.12% | ||
| AAOI - LITE | 65% Loosely correlated | +3.98% | ||
| VIAV - LITE | 64% Loosely correlated | +2.32% | ||
| NOK - LITE | 45% Loosely correlated | +2.37% | ||
| ADTN - LITE | 42% Loosely correlated | +1.03% | ||
More | ||||