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AAOI vs LITE
Which Stock Would AI Choose? Applied Optoelectronics (AAOI) vs. Lumentum Holdings (LITE) Stock Comparison
Key Takeaways
- AAOI and LITE both operate in AI-driven optical networking but sit at very different stages of scale and profitability.
- Lumentum's market capitalization is roughly an order of magnitude larger, supported by a multiyear partnership and investment from NVIDIA.
- Applied Optoelectronics has delivered explosive revenue growth but remains volatile after multiple capital raises and heavy customer concentration.
- Lumentum is expanding margins and projecting strong forward earnings, while AAOI's profitability is still in an early, capacity-constrained phase.
- Both stocks have pulled back sharply from recent highs, reflecting sector-wide profit-taking in AI-linked optical names.
Introduction
Applied Optoelectronics and Lumentum Holdings are two of the most closely watched pure-plays in the optical and photonics supply chain powering AI data centers. Both sell the lasers, transceivers, and optical modules that move data at high speed, and both have ridden a powerful wave of AI infrastructure spending. Yet the two companies differ sharply in size, profitability, and positioning. This stock comparison examines their relative performance, growth drivers, and risk profiles to help traders and investors assess which name currently offers the more favorable market positioning in a sector that has become both high-growth and highly volatile.
AAOI Overview and Recent Performance
AAOI, or Applied Optoelectronics, Inc., develops and manufactures advanced optical networking products, including high-speed transceivers, indium phosphide (InP) lasers, and components for data centers and cable broadband networks. Its data center segment has been the primary growth engine, driven by demand for 400G, 800G, and next-generation 1.6T transceivers.
Recent market activity has been notably volatile. The company completed a roughly $600 million at-the-market equity offering—its third major capital raise of 2026—to fund manufacturing expansion, which triggered concerns about shareholder dilution. The stock has also pulled back sharply from its 52-week high amid broader profit-taking across AI-linked optical names. Despite the recent selloff, AAOI remains sharply higher on a year-to-date basis, reflecting investor enthusiasm for its laser technology and its potential role in co-packaged optics (CPO), an emerging approach that integrates optics more tightly with compute chips. A key risk is concentration: a large majority of its revenue comes from just a few major customers.
LITE Overview and Recent Performance
LITE, or Lumentum Holdings, Inc., is a global photonics company selling lasers, optical modules, subsystems, and optical circuit switches (OCS) used in cloud, AI, telecom, and industrial applications. Its scale and product breadth are considerably larger than AAOI's, and it has established a multiyear strategic agreement with NVIDIA that includes a multibillion-dollar purchase commitment and a $2 billion investment to expand U.S. manufacturing.
Lumentum's recent performance has been marked by triple-digit revenue growth and expanding margins. In its latest reported quarter, revenue surpassed $1 billion for the first time, with non-GAAP gross margin exceeding 50%. Management has indicated that demand for certain components exceeds supply well into the future, and the company has begun shipping 1.6T transceivers while ramping optical circuit switches. Still, the stock has also experienced sharp pullbacks in recent weeks, alongside reports of insider selling, signaling that even strong fundamentals have not shielded the name from sector-wide valuation compression.
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Head-to-Head Comparison
The clearest contrast between these two stocks is scale and maturity. Lumentum is a diversified, globally scaled photonics leader with an established NVIDIA partnership and a market capitalization far exceeding AAOI's. Applied Optoelectronics, by contrast, is a smaller, faster-growing player whose story leans heavily on in-house laser manufacturing and the emerging CPO opportunity.
On growth, both companies are benefiting from the transition to higher-speed optical connectivity and the shift from copper to fiber inside AI clusters. Lumentum's momentum is more diversified across transceivers, optical circuit switches, and lasers, while AAOI's trajectory is more concentrated in high-speed transceivers and its laser supply chain. On risk, AAOI carries greater customer concentration and has raised equity repeatedly, adding dilution risk; Lumentum faces supply-capacity constraints and elevated valuation. In terms of market sentiment, both names have seen enthusiasm cool after dramatic runs, with analysts broadly constructive but increasingly focused on whether current prices already reflect years of anticipated earnings growth.
Tickeron AI Verdict
Based on observable factors, Tickeron's AI would likely tilt toward LITE for its greater trend consistency, broader revenue base, improving profitability, and strategic backing from a key AI customer. Lumentum's combination of scale, expanding margins, and multi-quarter visibility offers a relatively more stable profile than AAOI's earlier-stage, capacity-constrained ramp. That said, the verdict is probabilistic rather than definitive: AAOI's sharper growth trajectory and laser-led CPO optionality could produce outsized returns if execution and capacity scale smoothly. Traders seeking relative stability may favor LITE, while those comfortable with higher volatility and a smaller, higher-beta profile may still find AAOI compelling. Neither name is without meaningful valuation and concentration risk.
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 Hold and LITE is a Hold.
AAOI sees MACD Histogram crosses below signal line
AAOI saw its Moving Average Convergence Divergence Histogram (MACD) turn negative on October 13, 2026. This is a bearish signal that suggests the stock could decline going forward. Tickeron's A.I.dvisor looked at 43 instances where the indicator turned negative. In 39 of the 43 cases the stock moved lower in the days that followed. This puts the odds of a downward move at 90%.
Technical Analysis (Indicators)
Bearish Trend Analysis
The Momentum Indicator moved below the 0 level on October 13, 2026. You may want to consider selling the stock, shorting the stock, or exploring put options on AAOI as a result. In 74 of 88 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are 84%.
AAOI moved below its 50-day moving average on October 08, 2026 date and that indicates a change from an upward trend to a downward trend.
The 50-day moving average for AAOI moved below the 200-day moving average on October 15, 2026. This could be a long-term bearish signal for the stock as the stock shifts to an downward trend.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where AAOI declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 87%.
AAOI broke above its upper Bollinger Band on October 02, 2026. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
The Aroon Indicator for AAOI entered a downward trend on October 02, 2026. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
Bullish Trend Analysis
The RSI Indicator points to a transition from a downward trend to an upward trend -- in cases where AAOI's RSI Indicator exited the oversold zone, 24 of 25 resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are 90%.
The Stochastic Oscillator shows that the ticker has stayed in the oversold zone for 5 days. The price of this ticker is presumed to bounce back soon, since the longer the ticker stays in the oversold zone, the more promptly an upward trend is expected.
Following a +12.61% 3-day Advance, the price is estimated to grow further. Considering data from situations where AAOI advanced for three days, in 232 of 268 cases, the price rose further within the following month. The odds of a continued upward trend are 87%.
Fundamental Analysis (Ratings)
The Tickeron Valuation Rating of 8 (best 1 - 100 worst) indicates that the company is seriously undervalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (3.981) is normal, around the industry mean (7.128). AAOI has a moderately low P/E Ratio (-101.558) as compared to the industry average of (5.011). Projected Growth (PEG Ratio) (0.790) is also within normal values, averaging (0.778). Dividend Yield (0.000) settles around the average of (0.136) among similar stocks. P/S Ratio (11.834) is also within normal values, averaging (11.937).
The Tickeron PE Growth Rating for this company is 19 (best 1 - 100 worst), pointing to outstanding earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Seasonality Score of 32 (best 1 - 100 worst) indicates that the company is slightly undervalued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
The Tickeron Price Growth Rating for this company is 50 (best 1 - 100 worst), indicating steady price growth. AAOI’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Profit vs. Risk Rating rating for this company is 68 (best 1 - 100 worst), indicating that the returns do not compensate for the risks. AAOI’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 78, placing this stock better than average.
The Tickeron SMR rating for this company is 92 (best 1 - 100 worst), indicating weak sales and an unprofitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
LITE in downward trend: price dove below 50-day moving average on October 14, 2026
LITE moved below its 50-day moving average on October 14, 2026 date and that indicates a change from an upward trend to a downward trend. In 27 of 31 similar past instances, the stock price decreased further within the following month. The odds of a continued downward trend are 87%.
Technical Analysis (Indicators)
Bearish Trend Analysis
The 10-day RSI Indicator for LITE moved out of overbought territory on October 08, 2026. This could be a bearish sign for the stock. Traders may want to consider selling the stock or buying put options. Tickeron's A.I.dvisor looked at 44 similar instances where the indicator moved out of overbought territory. In 34 of the 44 cases, the stock moved lower in the following days. This puts the odds of a move lower at 77%.
The Momentum Indicator moved below the 0 level on October 14, 2026. You may want to consider selling the stock, shorting the stock, or exploring put options on LITE as a result. In 66 of 82 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are 80%.
The Moving Average Convergence Divergence Histogram (MACD) for LITE turned negative on October 13, 2026. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 47 similar instances when the indicator turned negative. In 37 of the 47 cases the stock turned lower in the days that followed. This puts the odds of success at 79%.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where LITE declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 76%.
Bullish Trend Analysis
The Stochastic Oscillator shows that the ticker has stayed in the oversold zone for 3 days. The price of this ticker is presumed to bounce back soon, since the longer the ticker stays in the oversold zone, the more promptly an upward trend is expected.
Following a +4.42% 3-day Advance, the price is estimated to grow further. Considering data from situations where LITE advanced for three days, in 265 of 321 cases, the price rose further within the following month. The odds of a continued upward trend are 83%.
LITE may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
The Aroon Indicator entered an Uptrend today. In 231 of 288 cases where LITE Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are 80%.
Fundamental Analysis (Ratings)
The Tickeron Profit vs. Risk Rating rating for this company is 27 (best 1 - 100 worst), indicating low risk on high returns. The average Profit vs. Risk Rating rating for the industry is 78, placing this stock better than average.
The Tickeron Price Growth Rating for this company is 50 (best 1 - 100 worst), indicating steady price growth. LITE’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Valuation Rating of 64 (best 1 - 100 worst) indicates that the company is fair valued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (16.119) is normal, around the industry mean (7.128). P/E Ratio (-8.977) is within average values for comparable stocks, (5.011). Projected Growth (PEG Ratio) (0.080) is also within normal values, averaging (0.778). Dividend Yield (0.000) settles around the average of (0.136) among similar stocks. P/S Ratio (22.779) is also within normal values, averaging (11.937).
The Tickeron Seasonality Score of 95 (best 1 - 100 worst) indicates that the company is significantly overvalued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
The Tickeron PE Growth Rating for this company is 97 (best 1 - 100 worst), pointing to worse than average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron SMR rating for this company is 100 (best 1 - 100 worst), indicating weak sales and an unprofitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
AAOI | LITE | ||
|---|---|---|---|
OUTLOOK RATING 1..100 | 76 | 82 | |
VALUATION overvalued / fair valued / undervalued 1..100 | 8 Undervalued | 64 Fair valued | |
PROFIT vs RISK RATING 1..100 | 68 | 27 | |
SMR RATING 1..100 | 92 | 100 | |
PRICE GROWTH RATING 1..100 | 50 | 50 | |
P/E GROWTH RATING 1..100 | 19 | 97 | |
SEASONALITY SCORE 1..100 | 32 | 90 |
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 (8) in the Telecommunications Equipment industry is somewhat better than the same rating for LITE (64). This means that AAOI’s stock grew somewhat faster than LITE’s over the last 12 months.
LITE's Profit vs Risk Rating (27) in the Telecommunications Equipment industry is somewhat better than the same rating for AAOI (68). 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.
AAOI's Price Growth Rating (50) in the Telecommunications Equipment industry is in the same range as LITE (50). This means that AAOI’s stock grew similarly to LITE’s over the last 12 months.
AAOI's P/E Growth Rating (19) in the Telecommunications Equipment industry is significantly better than the same rating for LITE (97). This means that AAOI’s stock grew significantly faster than LITE’s over the last 12 months.
| AAOI | LITE | |
|---|---|---|
| RSI ODDS (%) | 2 days ago 90% | 2 days ago 77% |
| Stochastic ODDS (%) | 2 days ago 76% | 2 days ago 73% |
| Momentum ODDS (%) | 2 days ago 84% | 2 days ago 80% |
| MACD ODDS (%) | 2 days ago 90% | 2 days ago 79% |
| TrendWeek ODDS (%) | 2 days ago 86% | 2 days ago 78% |
| TrendMonth ODDS (%) | 2 days ago 87% | 2 days ago 81% |
| Advances ODDS (%) | 15 days ago 87% | 15 days ago 83% |
| Declines ODDS (%) | 5 days ago 87% | 5 days ago 76% |
| BollingerBands ODDS (%) | 2 days ago 78% | 2 days ago 86% |
| Aroon ODDS (%) | 2 days ago 84% | 2 days ago 80% |
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 2 FA rating(s) are green while LITE’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 3 TA indicator(s) are bullish while LITE’s TA Score has 4 bullish TA indicator(s).
- AAOI’s TA Score: 3 bullish, 7 bearish.
- LITE’s TA Score: 4 bullish, 5 bearish.
Price Growth
AAOI (@Telecommunications Equipment) experienced а -22.33% price change this week, while LITE (@Telecommunications Equipment) price change was -16.16% for the same time period.
The average weekly price growth across all stocks in the @Telecommunications Equipment industry was -7.22%. For the same industry, the average monthly price growth was -10.11%, and the average quarterly price growth was -13.42%.
Reported Earning Dates
AAOI is expected to report earnings on Nov 05, 2026.
LITE is expected to report earnings on Nov 05, 2026.
Industries' Descriptions
@Telecommunications Equipment (-7.22% 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 68% 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% | +3.48% | ||
| LITE - AAOI | 68% Closely correlated | +1.26% | ||
| CIEN - AAOI | 57% Loosely correlated | +3.45% | ||
| VIAV - AAOI | 54% Loosely correlated | +4.79% | ||
| ADTN - AAOI | 49% Loosely correlated | +1.90% | ||
| LASR - AAOI | 47% Loosely correlated | +3.33% | ||
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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 71% 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% | +1.26% | ||
| CIEN - LITE | 71% Closely correlated | +3.45% | ||
| AAOI - LITE | 67% Closely correlated | +3.48% | ||
| VIAV - LITE | 64% Loosely correlated | +4.79% | ||
| NOK - LITE | 48% Loosely correlated | -0.66% | ||
| ADTN - LITE | 44% Loosely correlated | +1.90% | ||
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