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AAOI - Potential Acquisition Candidate?

|Includes: Applied Optoelectronics, Inc. (AAOI)

Recently, AOI announced their collaboration with MACOM (NASDAQ:MTSI) to support 100G and QSFP28 Optical transceiver solutions for datacenter applications. The QSFP28 transceiver is a key factor for the 100G (100 Gigabits) switching and routing connectivity. 100G is the latest trend in data centers and rampant demand for it will surely increase revenues on both industry.

For future endeavors, AOI will host the COBO or Consortium for Onboard Optics on Feb 8-9 of 2017 that will be held in Taipei, Taiwan. This consortium aims to discuss the standards for interconnects for data center applications. AOI will showcase their technology offers to the customers.

On the Data Center charts too, AOI will be supplying 40Gbps QSFP+ and 100 Gbps QSFP28 optical transceiver modules. This deal will expose the capabilities of the optoelectronics industry as the communication trend tends to go Fiber Optics. According to Dr. Thompson Lin, CEO of AOI, "We believe we are the market leader within our current datacenter customers and we are excited to have the opportunity to demonstrate our capabilities to this new customer as the relationship deepens over time".

As of now, AOI's landing more deals with the Hyper-data centers. Speculations were circulating the market as that Hyper-data center can be FB (Facebook: NASDAQ). The identity is kept hidden on the AOI's news portal for now. But deals like these will surely provide exposure on AOI's capabilities in optoelectronics. AOI, though in decades of experience, is a support company that may not be face of charts of revenue but an optimal outsource provider. As the technology revolutionize through the use of Fiber Optics, we were going to be hearing more Optoelectronics companies in the following years, as of IC Insights.

Keep an eye out on AAOI.

Disclosure: I am/we are long AAOI.

Additional disclosure: Some model portfolios at have a long position in AAOI

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