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Applied Optoelectronics earns most of its revenue from products for cable television networks, with internet data centers providing most of the rest. It supplies cable equipment vendors with products that transmit and distribute signals, including optical equipment and electronic amplifiers. It also sells directly to cable network operators under its Quantum Bandwidth brand to support network upgrades.
For data centers, the company sells modules that send and receive optical signals and plug into switches and servers. Buyers include hyperscale internet data center operators and their equipment suppliers. Most of these modules use lasers and light-engine subassemblies made by Applied Optoelectronics itself.
The business relies heavily on a few customers. Digicomm, its key cable customer, supplies more than half of total revenue, while Microsoft is its key data center customer. Customers generally buy through recurring purchase orders rather than long-term contracts, making continued orders from these customers especially important. Export controls also govern permitted destinations, end users and uses, and whether sales require a license.
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AOI also depends on CATV DOCSIS 4.0 deployments and Digicomm, its key CATV customer, which supplied 53.1% of 2025 revenue but is missing from this list.
Coherent competes with AOI to sell data-center optical transceivers and communications laser components to network operators and equipment makers. Watch Coherent’s Datacenter & Communications business for competition in the modules and lasers AOI also makes.
Lumentum Holdings competes with AOI in the optical modules and laser components customers use in communications networks. Its sales of laser chips for customers to build into equipment, and complete optical modules for network deployment, are the relevant businesses to watch.
AOI depends heavily on Microsoft’s purchases of data-center optical products: Microsoft supplied 28.8% of AOI’s 2025 revenue. The cloud and software company’s orders for modules connecting data-center switches and servers matter directly to AOI, which generally relies on recurring purchase orders rather than long-term contracts.
Fabrinet and AOI share the network investment cycle, but Fabrinet gets paid to manufacture optical communications products for equipment makers, while AOI designs and makes its own transceivers. Fabrinet’s optical communications manufacturing activity offers a read on demand beyond AOI’s own customer orders.
Oracle is a paying customer for AOI’s data-center products and supplied 12.4% of AOI’s revenue in 2024. For this cloud and software provider, watch purchases for its data-center business rather than treating all of Oracle’s revenue as demand for AOI’s optical modules.
MACOM Technology Solutions Holdings, Inc and AOI both serve upgrades to faster data-center links: MACOM sells chips customers build into larger systems, while AOI sells the optical transceivers connecting switches and servers. MACOM’s products for 800G and faster links are the relevant area to watch alongside AOI’s 800G AI interconnections.
Semtech Corp and AOI share demand for faster data-center and optical-access connections: Semtech sells chips to equipment makers, while AOI sells optical modules to equipment suppliers and network operators. Watch Semtech’s Signal Integrity sales, which include optical data communications, rather than its unrelated IoT businesses.
Corning Incorporated and AOI serve different parts of fiber networks: Corning supplies the fiber and connectivity infrastructure, while AOI supplies optical transceivers and CATV equipment that operate over those networks.
Ciena and AOI share spending driven by cloud and AI traffic, but Ciena sells network operators optical systems that carry the traffic, while AOI sells modules connecting data-center equipment. Ciena’s optical networking business is the place to watch for broader network-capacity demand.
Astera Labs and AOI both sell into hyperscalers’ AI infrastructure investment: Astera supplies connectivity chips and modules, while AOI supplies optical transceivers for their data-center networks. Astera’s sales to hyperscalers offer another view of this concentrated customer group’s connectivity demand.
POET Technologies Inc. and AOI address the same AI optical-connectivity spending at different stages: POET develops optical engines for transceiver makers and AI light sources, while AOI sells finished transceivers connecting AI infrastructure. Watch POET’s optical-engine and light-source developments, not as evidence of orders from AOI.
Vertiv and AOI share exposure to data-center construction and expansion: Vertiv sells power and cooling equipment, while AOI sells optical connections for the same infrastructure. Vertiv’s data-center power and cooling business offers a broader view of buildout demand, rather than a direct measure of AOI’s module orders.
Microsoft Corp earningsMSFT
Microsoft's report shows whether its cloud and data-center buildout is still expanding, a demand signal for Applied Optoelectronics' optical transceivers but not a count of its orders.
Read Microsoft's cloud growth alongside its infrastructure spending. Strength in both would show that Microsoft is still expanding cloud and data-center capacity, supporting the demand backdrop for AOI's sales to this major customer, but it would not confirm higher AOI orders. Slower growth or spending would suggest that this buildout may be cooling, raising uncertainty around AOI's concentrated data-center demand.
Coherent Corp. earningsCOHR
Coherent's Datacenter & Communications business shows demand for optical modules and laser components in a market where it competes with Applied Optoelectronics for some of the same customers.
Watch sales and demand commentary for Coherent's Datacenter & Communications business. Stronger sales would show that customers are still spending in the optical-communications market where the two companies compete, potentially expanding the opportunity for AOI, but would not show that AOI won orders or share. Weaker sales would point to a softer market for both companies' overlapping products.
Applied Optoelectronics, Inc. earningsThis company
Applied Optoelectronics’ report will show whether CATV sales can keep growing while its data-center business holds up and manufacturing margins improve.
Read CATV and data-center revenue side by side, then check gross margin. If CATV remains strong, data-center revenue holds up and margin improves, growth is coming from both markets and higher volume is helping cover manufacturing costs. If CATV carries sales while data-center revenue or margin weakens, the business is leaning more heavily on one market and a few customers, with less volume to absorb costs.
