1 Growth Stock Down 50% to Buy Right Now

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Eppplied Optolectronics increased by 178 % during the past year, but it still decreases by 50 % from the highest annual level.
Manufacturing in America and Taiwan helps the company to avoid most of the risk of customs tariffs.
Participation reduced sharply, but the share price rose also (decreased, and rose again).
10 shares we love better than applied visual electronics ›

I know, I know. Applied visual electronics (Nasdaq: aaoi) Not exactly the bottom in dumps. As of August 15, 2025, it has gained 178 % over the past 52 weeks.

But applied optical electronics gained their prices in the difficult and honest way: by selling high -performance visual network products in many hungry target markets. Despite the impressive return for one year, the stock decreased by 50 % of the highest levels of years in December.

Here is the reason that I think you should consider buying applied visual electrons in this strange mix of high gains and declines.

In the last report for the second quarter, applied optics electronics witnessed great growth in the largest of its sections. With the artificial intelligence market (AI), strong demand leads to the fastest network units in the company, the data center sales increased by 30 % year on an annual basis to $ 44.8 million. Cable TV sales (CATV) increased from $ 5.8 million to $ 56.0 million, as the infrastructure of the optical fiber network was invested.

These results included the first shipment of the company with 400 GB at the data center to a technical giant who did not buy applied visual electronics products for several years. In the future, many adult customers test the 800 GB product that has not yet been released. Shipping should start before the end of 2025, with exact timing depending on the factory promotions and customer qualification test.

Applied visual electronics also contains sufficient international manufacturing to avoid most of the tariff costs on the horizon. Laser chips have been manufactured in America for years, and the next generation network transfers in Texas and Taiwan will be made. The most expensive tariff categories are barely a source of concern ever, according to the comment on profits by financial director Stephen Mori:

In the designs of the transmission and reception device 800G and 1.6T, less than 10 % of the value of the components currently used by China are obtained, and we have a path where we expand the production range to reduce this China’s content ultimately to nearly zero. We are also in discussion with many major suppliers about the inclusion of their production of the United States to support the strong local supply chain.

Photo source: Getty Images.

Besides AI and CATV networks, applied visual electronics also manufacture laser sensors and network controls. It is an exciting company in Nexus for many promising growth markets.

However, it is not a flawless success story. I can see how two problems can prevent you from buying applied visual electronics shares.

The company’s financial results are a bit jump, as a large part of the generation of revenue comes from very large requests from a handful of major customers. This is a deal for investors who prefer a predictive company with smooth revenue flows. However, the rough road should be calmed down over time as the applied optics electronics expands its customer’s list.
Applied visual electronics are used to printing new shares, to a large extent to support the stock -based compensation program. The number of shares has increased by 125 % in the past three years. But this mitigation occurred in a period of impressive stocks. It is difficult to complain of heavy dilution when the share price continues to rise by 1,340 %.

There will be surprises on the road forward, and they will not be all enjoyable. I am still admired by the visual visual innovation and promoting the leading performance in the market. Its focus on American manufacturing should also be useful in the era of international trade tension.

AI BOOM is here to survive, and high -speed networks do not explode any time soon. If you can focus on the growth of applied visual electronics and overcoming these possible negative aspects, I think the stock should serve you well over the next few years.

Before buying shares in applied visual electronics, consider this:

the Motley Adviser is a lie The analyst’s team has just identified what they think 10 best stocks For investors to buy now … the optical electronics applied were not one of them. The ten shares that made the pieces can produce monster revenues in the coming years.

Look at when Netflix This list was submitted on December 17, 2004 … if you invest $ 1,000 at the time of our recommendation, You will have $ 668155!* Or when Nafidia This list was presented on April 15, 2005 … if you invest $ 1,000 at the time of our recommendation, You will have 1,106,071 dollars!

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*The stock consultant dates back from August 13, 2025

Anders bylund has no position in any of the mentioned shares. There is no position in Motley Fool in any of the mentioned stocks. Motley Fool has a disclosure policy.

1 share grown 50 % decrease for purchase now was originally published by motley fool

2025-08-17 20:23:00

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