Applied Optoelectronics, Inc. (NASDAQ:AAOI) just suffered one of its worst trading sessions of 2026. It still happens to be outperforming Nvidia Corp (NASDAQ:NVDA) by more than 200 percentage points this year.
Shares of the AI networking company plunged 17% Thursday after Meta Platforms, Inc. (NASDAQ:META) CEO Mark Zuckerberg‘s comments on AI infrastructure spending sparked a broad sell-off across photonics stocks. While Zuckerberg said Meta remained confident it would deliver clearer returns from its AI investments over the next three to six months, investors focused on his acknowledgment that the company’s 2026 reorganization and layoffs hadn’t been “perfectly smooth,” fueling concerns that the AI infrastructure boom may be cooling.
Yet even after Thursday’s sharp decline, Applied Optoelectronics’ stock remains up more than 205% year to date and over 320% in the past year. By comparison, Nvidia has gained about 3% in 2026 and roughly 22% over the last 12 months, highlighting just how extraordinary AAOI’s rally has been.
AAOI’s AI Rally Faces Its Biggest Test
Thursday’s sell-off wasn’t just about Meta’s comments—it was also about expectations.
