Applied Optoelectronics, Inc reported record first quarter 2026 revenue of $151.1 million, up 51% year-over-year and 13% sequentially, driven by surging demand for AI infrastructure optics and continued strength in CATV deployments. Datacenter products accounted for 54% of revenue, while CATV represented 44%. The company said 400G transceiver sales increased 10x from a year earlier, helping datacenter revenue climb 154% year-over-year to $81.4 million. AOI also completed its first volume shipment of 800G single-mode transceivers to a major hyperscale customer and expects a significant ramp beginning in Q2.
The company outlined aggressive scaling plans for its next-generation optical transceiver portfolio. AOI secured its first volume order for 1.6T transceivers from a major hyperscale customer and said additional 800G programs are expected to enter production later this year. Production capacity for 800G and 1.6T products is projected to expand from nearly 100,000 units per month exiting Q1 to more than 650,000 units per month by the end of 2026 and over 930,000 units per month by the end of 2027. AOI said 200G and 400G products represented 46.7% of datacenter revenue during the quarter, while 100G products accounted for 41.9%. 800G products generated $4.6 million in revenue, or 5.6% of datacenter sales, with shipment volumes expected to increase nearly fourfold sequentially in Q2.
AOI also expanded its Texas manufacturing footprint to approximately 900,000 square feet (83,613 square meters) across facilities in Sugar Land, Pearland, and Houston to support scaling of 800G and 1.6T production. The company emphasized its vertically integrated laser manufacturing capabilities as a strategic differentiator for future co-packaged optics (CPO) architectures, noting plans to increase laser fabrication capacity by approximately 350% by the end of 2027. For Q2 2026, AOI forecast revenue between $180 million and $198 million and projected non-GAAP gross margins between 29% and 30%. Looking ahead, the company said it now expects to generate more than $1.1 billion in revenue during 2026 with non-GAAP operating profit exceeding $140 million.
- Q1 2026 revenue reached a record $151.1 million
- Datacenter revenue rose 154% year-over-year to $81.4 million
- 400G transceiver sales increased 10x year-over-year
- 800G products generated $4.6 million in Q1 revenue
- AOI expects 800G shipment volumes to increase nearly 4x sequentially in Q2
- The company secured its first volume order for 1.6T transceivers
- 800G and 1.6T production capacity is expected to exceed 650,000 units per month by year-end 2026
- Texas manufacturing footprint expanded to roughly 900,000 square feet (83,613 square meters)
- AOI expects annual CATV revenue to exceed $325 million, including software revenue
- FY2026 revenue guidance increased to more than $1.1 billion
“Our in-house laser manufacturing positions us well to support both near-term customer needs and longer-term growth,” the company said, adding that co-packaged optics architectures are expected to drive increased demand for high-power lasers.
🌐 Analysis: AOI’s results underscore how hyperscaler AI cluster deployments are rapidly reshaping the optical transceiver market around 400G, 800G, and emerging 1.6T Ethernet optics. AOI’s vertical integration strategy around lasers may become increasingly important as AI fabrics evolve toward co-packaged optics and higher-density optical interconnect architectures. The company’s forecast for approximately $471 million per month of future datacenter transceiver revenue by mid-2027 highlights the extraordinary scale assumptions now driving the AI networking supply chain. The roadmap aligns with broader industry transitions toward 800G and 1.6T Ethernet fabrics for AI scale-out clusters using technologies such as 224G SerDes, linear-drive optics, and eventually CPO-based architectures. AOI’s manufacturing expansion in Texas also reflects a broader trend toward domestic optical supply chain investment amid ongoing geopolitical and tariff uncertainty.
