Amazon walked away from them in 2017 and found a new supplier.
The stock got crushed as the online retail giant accounted for roughly half of its sales. The company spent years rebuilding in relative obscurity, making the small fiber-optic components that connect servers inside data centers.
Not glamorous work, and not the kind of thing that makes headlines. But essential.
Then the AI buildout kicked into high gear.
Data centers are going up everywhere. A single facility can draw as much power as a small city.
Hundreds are being built right now, and hundreds more are being upgraded to handle the demands of future AI workloads.
The companies building them– Amazon, Microsoft, Google, and Meta- are spending billions, not just on GPUs, but on everything that connects those GPUs together and keeps them talking to each other at speed.
That is the part most investors miss. Everyone buys Nvidia.
The names that actually keep the system running, power infrastructure, cooling, fiber, transceivers, those tend to sit further down the cap scale, in niche fields with serious barriers to entry, away from the front page.
Applied Optoelectronics (AAOI) makes optical transceivers.
They are the connectors that allow servers inside a data center to communicate at speeds that were not possible a few years ago.
Without them, the GPUs sitting in those facilities cannot do their job. The company had the technology, had the manufacturing capability, and had been quietly building toward the moment when that technology would matter at scale.
Amazon noticed. In 2024 they came back with a $4 billion, ten-year purchase agreement. They didn’t offer a vendor relationship. They bet on a company's future.
The 2-to-100 scan caught the chart turning in December. AAOI was completing a long-term trend reversal, breaking above a key level near $40, and the setup looked exactly like the kind of move the scan was built to find.
We got long.
