Applied Optoelectronics Inc (AAOI) Announces 50 Gbps PAM-4 Directly Modulated Lasers


Applied Optoelectronics Inc (NASDAQ:AAOI) announced the development of uncooled 50 Gigabits per second (Gbps) PAM-4 directly modulated lasers (DMLs) for its 200 Gbps and 400 Gbps optical transceivers.

The 50 Gbps per channel lasers are produced with AOI’s in-house combination of Metal Organic Chemical Vapor Deposition (MOCVD) and Molecular Beam Epitaxy (MBE) crystal growth techniques. The lasers feature high bandwidth, high linearity, and low noise, all of which are critical for demanding applications like 200 Gbps and 400 Gbps transceivers. The newly developed lasers have demonstrated high extinction ratio of up to 6 dB and a highly desirable transmitter dispersion eye closure quaternary (TDECQ) value of less than 2.5dB. All four standard coarse wavelength division multiplexing (CWDM) channels (including 1270-nm, 1290-nm, 1310-nm, and 1330-nm wavelengths) have achieved data transmission over single mode fiber lengths of 10 km. These lasers are suitable in the production of 200G and 400G FR8 transceivers that meet the IEEE 802.3 200G / 400G Ethernet transceiver standards.

“Transceivers based on directly modulated lasers are preferable in datacenters due to their low power consumption and low cost. The high linearity and low noise of our 25 GBaud DML is the key to make 50 Gbps per channel possible. With this laser, leveraging our high volume, high yield 100G transceiver platform, AOI is able to continue the technological and cost leadership that is of paramount importance to our hyperscale datacenter customers.” commented Dr. Fred Chang, the SVP and General Manager of North America.

Shares of Applied Optoelectronics are up nearly 2.5% to $71.40 in pre-market trading. AAOI has a 1-year high of $103.41 and a 1-year low of $13.06. The stock’s 50-day moving average is $77.09 and its 200-day moving average is $57.21.

On the ratings front, AAOI has been the subject of a number of recent research reports. In a report released yesterday, Northland analyst Tim Savageaux reiterated a Sell rating on AAOI, with a price target of $47, which reflects a potential downside of -33% from last closing price. Separately, on the same day, Craig-Hallum’s Richard Shannon reiterated a Buy rating on the stock and has a price target of $95.

According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Tim Savageaux and Richard Shannon have a yearly average return of 0.1% and 22.6% respectively. Savageaux has a success rate of 44% and is ranked #3151 out of 4628 analysts, while Shannon has a success rate of 45% and is ranked #516.

Sentiment on the street is mostly bullish on AAOI stock. Out of 9 analysts who cover the stock, 7 suggest a Buy rating and 2 recommend to Sell the stock. The 12-month average price target assigned to the stock is $83.63, which represents a potential upside of 20% from where the stock is currently trading.

Applied Optoelectronics, Inc. designs, develops and manufactures optical devices, packaged optical components, optical subsystems, laser transmitters, and fiber optic transceivers. It manufactures optical devices, including laser diodes, photodiodes, related modules and circuitry and equipment for applications in fiber-to-the-home, cable television, point to point communications and wireless. The company provides its products for three networking end-markets: internet data center, cable television and fiber-to-the-home.