AAOI Is Down 15% in Two Days. What History Says Now.

Applied Optoelectronics Is Down 15% in Two Days. What History Says.

Applied Optoelectronics, Inc. (AAOI) has entered a new phase of price volatility as of May 16, 2026, recording a drawdown of -14.7% from its all-time high of $223.10. This rapid decline has pushed the stock into the yellow zone, signaling a shift from its previous green zone status. Our data shows that this movement occurred over a duration of just 2 days, marking a sharp departure from the stock's recent price stability.

Understanding the Drawdown Severity Score™

The Drawdown Severity Score™ for Applied Optoelectronics, Inc. (AAOI) currently sits at 2.2. In our framework, a score of 2.2 is classified as Moderately Elevated, which triggers the transition into the yellow zone. This score is a proprietary metric we use to measure the intensity of a price drop relative to an asset's historical behavior.

When a stock moves from the green zone to the yellow zone, it indicates that the current sell-off is beginning to exceed the "noise" of standard market fluctuations. For AAOI, the current price of $190.36 represents a significant distance from its peak. While the stock has faced 30 total historical drawdown events, the speed of this 2-day decline is the primary driver behind the current Drawdown Severity Score™.

Historical Context and Duration

To understand the current -14.7% drawdown, we must look at how Applied Optoelectronics, Inc. (AAOI) has behaved during previous pullbacks. Our data shows that the average maximum drawdown for this stock is -12.3%. The current decline of -14.7% has already surpassed that historical average, suggesting this event is more intense than a typical AAOI correction.

Historically, the average drawdown duration for AAOI is 149 days. Because the current event is only 2 days old, history suggests that recoveries for this specific ticker often require several months of price consolidation before reclaiming previous highs. We track these durations to provide context on how long capital has historically remained underwater during similar volatility phases.

Comparable Historical Drops

When analyzing more severe instances of volatility, our data shows that Applied Optoelectronics, Inc. (AAOI) has dropped 30% or more exactly 3 times in its history. These specific events are rare for this asset, and the historical data for these deep corrections shows an average duration of 1406 days.

It is important to note the small sample size for these 30% declines. With only 3 comparable events in our database, the average duration of 1406 days should be viewed as a specific historical data point rather than a definitive forecast. However, the Drawdown Severity Score™ of 2.2 indicates that while the stock is currently down -14.7%, it has not yet reached the severity levels seen in those three historic 30% sell-offs.

Data Scope and Analysis Limits

Our analysis of Applied Optoelectronics, Inc. (AAOI) is based strictly on proprietary price and drawdown history. We do not incorporate external factors, market sentiment, or fundamental shifts into this assessment. The Drawdown Severity Score™ is a reflection of mathematical price action and historical comparisons only.

By focusing on the -14.7% drawdown and the 2-day duration, we provide a localized view of risk based on how the stock has traded since its inception. This data-only approach allows investors to see where the current price sits within the context of the 30 historical drawdown events we have recorded for this ticker.

Metrics to Monitor

As Applied Optoelectronics, Inc. (AAOI) remains in the yellow zone, there are specific data thresholds to observe. A move back toward the green zone would require a reduction in the current -14.7% drawdown and a corresponding decrease in the Drawdown Severity Score™. Conversely, if the drawdown depth approaches the 30% threshold seen in those 3 historical instances, the severity score would likely climb toward the red zone.

We will continue to track the duration of this event. As of May 16, 2026, the 2-day window is exceptionally short compared to the historical average duration of 149 days. Investors can use these specific markers: the -14.7% depth, the 2.2 severity score, and the 149-day average duration: to contextualize the stock's path toward either recovery or further decline.