Please ensure Javascript is enabled for purposes of website accessibility

Why Applied Optoelectronics Stock Fell 25.1% in December

By Steve Symington - Updated Apr 15, 2019 at 4:33PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Between the market's plunge and pessimistic analysts, the fiber-optic networking specialist ended 2018 on a low note.

What happened

Shares of Applied Optoelectronics (AAOI -5.82%) declined 25.1% in December, according to data from S&P Global Market Intelligence, as the broader markets pulled back, and analysts offered pessimistic views of the fiber-optic networking products leader.

On the former, note that the S&P 500 index plunged 9% last month on fears of slowing global economic growth, political strife, and concerns over increasing regulation of the tech sector. It wasn't terribly surprising, then, to see many tech stocks decline in December despite a lack of company-specific news.

Check out the latest Applied Optoelectronics earnings call transcript.

Stock market data and arrow chart indicating losses

Image source: Getty Images.

So what

But Wall Street didn't do Applied Optoelectronics any favors. Piper Jaffray analyst James Fish, for one, weighed in on Dec. 18 to argue that Cisco Systems(CSCO 2.73%) $660 million acquisition of silicon photonics leader Luxterra will be "mostly negative" for Applied Optoelectronics, since the deal reduces its total addressable market and threatens to drive more-aggressive industry pricing. B. Riley analyst Dave Kang echoed that sentiment the same day, while reiterating his own neutral rating on Applied Optoelectronics' stock.

Now what

To be clear, there was no material news from Applied Optoelectronics that may have otherwise influenced its steep drop last month. But considering the company has had no qualms with revising its financial guidance in the face of adversity if need be, you can be sure investors will be watching closely for any preliminary updates to its most recent outlook between now and its fourth-quarter report early next month.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Applied Optoelectronics, Inc. Stock Quote
Applied Optoelectronics, Inc.
$1.86 (-5.82%) $0.12
Cisco Systems, Inc. Stock Quote
Cisco Systems, Inc.
$44.10 (2.73%) $1.17
Piper Sandler Companies Stock Quote
Piper Sandler Companies
$113.94 (2.67%) $2.96

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/25/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.