Applied Optoelectronics (AAOI) shares were halted today in the late afternoon.

The company will report earnings May 4th.

But today the pre-announced results which crushed the street estimates.

The street estimates for revenue is $89.8 million.

AAOI said its Q1 revenue came in at $96.2 million.

The street estimates for EPS (earnings per share) is 83 cents per share.

AAOI said its Q1 EPS was $1 per share.

When the stock resumed trading at 4:30pm this afternoon, shares soared higher by 20%.

Other fiber optic stocks were up after-hours in sympathy.

The sector had sold off this month.

AAOI pre-announced results for the 2nd straight quarter.

They reported Q4 earnings in February.

But in January they pre-announced Q4 results which propelled the stock higher.

Some of their customers upgrading data centers are Amazon (AMZN), Microsoft (MSFT) and Facebook (FB).

We recommend buying the September 45 calls.

AAOI is in a sweet spot now. It’s earnings are growing.

More upgrades from more analysts will help AAOI hit new highs.

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