Credit: Image source: Getty Images.What happened
Shares of Applied Optoelectronics (NASDAQ: AAOI) gained 163.6% in the first half of 2017, according to data from S&P Global Market Intelligence .
So what
The maker of optoelectronic components won its market gains by repeatedly reporting quarterly results way ahead of analyst expectations -- and the company's own projections. In fact, management pre-announced rosy fourth-quarter results in January, then crushed that slate of preliminary figures in February.
Image source: Getty Images.
Now what
The fiber-optic networking market is turning a corner in 2017, as telecoms around the world prepare to install next-generation 5G wireless networks. The much larger demands 5G networks will place on their back-end connections are forcing the telecoms to upgrade both their internet backbone connections and in-house data center networks, and fiber-optics offer the fastest and most cost-effective network solutions.
On top of that sectorwide macro trend, Applied Optoelectronics collects roughly half of its revenues from e-commerce and cloud computing giant Amazon.com (NASDAQ: AMZN) . Amazon's business is booming, and its cloud-computing data centers have become essential to its profit generation. That's another solid growth driver for Applied Optoelectronics and its high-speed data center interconnects.
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Anders Bylund owns shares of Amazon. The Motley Fool owns shares of and recommends Amazon. The Motley Fool has a disclosure policy .
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
