You may recall the study of TLND by Andrew, the young IBM employee(4 months ago).

AAOI drew much attention recently because of explosive earnings. Stock rose to 100 and is now sorta stabilized in the 60’s.

Andrew is my son’s friend, and he was nice enough to post the following:

Hey John,

Danny told me you wanted me to take a look at AAOI for you and I’d be more than happy to do so.

While fiber optic technology has been available since at least the late 70’s it’s popularity has exploded over the past two decades primarily because only recently has it become economically viable to implement it into corporate/consumer markets. This means that it’s probably as good a time as any to invest in fiber optic technology.

As far as I can tell AAOI manufactures various fiber optic odds and ends that someone running a data center or even a major telecommunication company would need to build a fiber optic network. They don’t really offer any revolutionary change in fiber optic technology but the thing they have going for them is having their manufacturing center based domestically. Nearly all major electronics companies choose to do their manufacturing in China or various other east Asian countries and have them imported. Having manufacturing so close to distribution gives them a significant advantage in terms of speed and quality control. Overall they seem like a well put together company and as a technology fiber optics has nowhere to go but up.

Andrew Walker

From the website:

3 markets:

  1. Cable TV broadband (CATV)
  2. Fiber-to-Home (FITH)
  3. Internet data centers

We design, manufacture, and integrate out own analog and digital lasers using proprietary Molecular Beam Epitaxy (MBE) fabrication process which we believe is unique…The lasers we make are proven to be reliable over time and highly tolerant of changes in temperature and humidity which is well suited for CATV and FITH markets where equipment is often installed outdoors.

The 3 end markets are driven by bandwidth demand fueled by growth of network connected devices that includes: Video Traffic, Cloud Computing, and Online Social Networking.

Looking forward to your feedback.