Applied Optoelectronics (AAOI) PT Raised to $10.50 at Rosenblatt
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Rosenblatt analyst Ryan Koontz raised the price target on Applied Optoelectronics (NASDAQ: AAOI) to $10.50 (from $9.00) while maintaining a Neutral rating.
The analyst commented, "Aiming to innovate with disruptive costs in a highly competitive market for data center and telecom optics, AAOI (reporting 2/25) faces a major challenge with its limited scale to deliver consistency for investors. Dominant customer Microsoft continues to spend at a healthy clip, but share shifts and inventory present material risk.
China's 5G programs are expected to regain momentum in F21, but the hyperscale transition to 400G looms as a major threat to AAOI, who we believe faces a declining market for its 100G products.
With AAOI stock fully recovering (+52% over the past 3 months) following the company's last guidance miss, we remain cautious that near-term 100G sales strength may not be sustainable. Our 4Q and F21 estimates remain unchanged. We maintain our Neutral rating and raise our PT from $9 to $10.50."
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