10 Best Emerging Tech Stocks to Buy Now

5. Applied Optoelectronics Inc. (NASDAQ:AAOI)

Market Capitalization as of September 11: $532.93 million

Number of Hedge Fund Holders: 25

Applied Optoelectronics Inc. (NASDAQ:AAOI) is a leading provider of optical components and modules for high-speed optical communications networks (telecom, FTTH, sensing, data center, wireless, and cable access industries). It manufactures a range of products, including transceivers, lasers, and optical subassemblies for various applications like in metro networks, and long-haul communications.

Applied Optoelectronics Inc. (NASDAQ:AAOI) generated $43.27 million in revenue for the second quarter of 2024, a 3.98% year-over-year improvement. The revenue for data center products of $34.4 million was up 25% compared to the same quarter in the prior year. Revenue for the 100G products increased 21%, and that for 400G products doubled in the same period.

However, revenue in the CATV segment was $5.8 million, which was down 38% year-over-year, driven by continued slow sales of DOCSIS 3.1 equipment.

The company just recently started receiving orders for 400G products from a large hyper-scale customer, shipping these products to 3 of the 5 largest hyper-scale data center customers in the US. There are positive results from the VCSEL-based 400G active optical cables, which Microsoft funded last year. Based on continued improvements, management expects better growth for the latter part of 2024.

25 hedge funds are long in Applied Optoelectronics Inc. (NASDAQ:AAOI), of which the largest shareholder is Point72 Asset Management. This stake has a position of $11,071,192. The company is well-positioned to meet the growing demand for 400G product orders and DOCSIS 4.0 solutions.