Is Applied Optoelectronics (AAOI) Stock Outpacing Its Computer and Technology Peers This Year?

·2 min read

For those looking to find strong Computer and Technology stocks, it is prudent to search for companies in the group that are outperforming their peers. Has Applied Optoelectronics (AAOI) been one of those stocks this year? Let's take a closer look at the stock's year-to-date performance to find out.

Applied Optoelectronics is one of 649 companies in the Computer and Technology group. The Computer and Technology group currently sits at #6 within the Zacks Sector Rank. The Zacks Sector Rank considers 16 different groups, measuring the average Zacks Rank of the individual stocks within the sector to gauge the strength of each group.

The Zacks Rank is a proven model that highlights a variety of stocks with the right characteristics to outperform the market over the next one to three months. The system emphasizes earnings estimate revisions and favors companies with improving earnings outlooks. Applied Optoelectronics is currently sporting a Zacks Rank of #2 (Buy).

Over the past 90 days, the Zacks Consensus Estimate for AAOI's full-year earnings has moved 35.9% higher. This means that analyst sentiment is stronger and the stock's earnings outlook is improving.

Based on the most recent data, AAOI has returned 48.7% so far this year. In comparison, Computer and Technology companies have returned an average of 9.7%. This means that Applied Optoelectronics is performing better than its sector in terms of year-to-date returns.

One other Computer and Technology stock that has outperformed the sector so far this year is Allegro MicroSystems, Inc. (ALGM). The stock is up 45.5% year-to-date.

The consensus estimate for Allegro MicroSystems, Inc.'s current year EPS has increased 10.4% over the past three months. The stock currently has a Zacks Rank #1 (Strong Buy).

Looking more specifically, Applied Optoelectronics belongs to the Electronics - Semiconductors industry, which includes 41 individual stocks and currently sits at #155 in the Zacks Industry Rank. Stocks in this group have gained about 13.6% so far this year, so AAOI is performing better this group in terms of year-to-date returns. Allegro MicroSystems, Inc. is also part of the same industry.

Applied Optoelectronics and Allegro MicroSystems, Inc. could continue their solid performance, so investors interested in Computer and Technology stocks should continue to pay close attention to these stocks.

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