AAOI- This stock should be looked at
Guidance for the Sept qtr is $63M revenues, and about break even earnings. So why is that exciting for a $7.50 stock ? For one, revenues were $41M for the June qtr, so revenue growth of 50% q over q sequentially with non gaap margins that will be 30% vs 25% in the June qtr. Add to that, the $300M Microsoft contract they received a couple months ago, in which AAOI won't post any revenues from till Q1 2024. Add to that the fact that the tangible book value is $5.41 as of June 30. Bottom line is, AAOI is poised for huge growth in the coming quarters. Analysts are thinking around $.50 eps for 2024, but my feeling is, it will much higher at $1.50-$2+. I think AAOI is on a huge come back from a 6 year down trend, and that Microsoft will be the first of more large customers looking to upgrade their data centers with the latest AAOI equipment to handle the new AI world. From what I'm hearing, data centers will be upgrading for the next few years, and it appears that AAOI is at the beginning of a huge new growth cycle.
