Shares of Applied Optoelectronics (AAOI) are experiencing a significant surge, increasing by over 50% in premarket trading. This positive movement follows the announcement of an agreement with Amazon (AMZN), granting the tech giant the option to acquire nearly 8 million shares of AAOI stock.
According to a filing with the U.S. Securities and Exchange Commission (SEC) on Thursday, Applied Optoelectronics issued a warrant to Amazon. This warrant allows Amazon to purchase up to 7.945 million shares of the company’s stock. The warrant can be exercised, in part or in full, at any point before March 13, 2035, at a price of $23.6954 per share.
Applied Optoelectronics focuses on developing advanced optical products. These components are critical for internet data centers, forming an essential infrastructure for cloud computing and the growing demand for artificial intelligence (AI) technologies. The company is headquartered in Sugar Land, Texas, and operates engineering and manufacturing facilities in Taiwan and China.
Tech companies, including Amazon, are making substantial investments in data centers to meet the increasing requirements of cloud computing and the expansion of AI applications.
Applied Optoelectronics shares closed at $15.87 on Thursday, representing an 8% decrease. However, the stock has still shown an increase of over 13% in the past 12 months.
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