We recently published 10 stocks that earn double digits effortlessly. Applied Optoelectronics Inc. (NASDAQ:AAOI) was one of the best performers on Wednesday.

Applied Optoelectronics soared to a near eight-year high on Wednesday, as investors were encouraged by positive coverage from an investment firm with a “buy” recommendation for its stock.

In intraday trading, the shares rose to a high of $46.30 before trimming gains to end the day down just 20.97 percent at $45.23 each.

Photo from Applied Optoelectronics website

In its market report, Zacks Research showed optimism for Applied Optoelectronics Inc’s laser transceivers. (NASDAQ:AAOI), calling them critical to the AI ​​revolution “because they overcome the speed and bandwidth limitations of traditional copper wires, making them valuable for enabling the massive, low-latency data flow required to train and operate AI models.”

“Also, with copper prices currently on the rise, these fiber optic cables are even more valuable,” the research firm added.

Zacks said Applied Optoelectronics Inc. (NASDAQ:AAOI) is currently benefiting either way, from both a shift from expensive copper and an increase in data center expansion.

In other news, Applied Optoelectronics Inc. (NASDAQ:AAOI) previously introduced a new 400 milliwatt narrow linewidth pump laser, a new product designed to meet the growing demand for silicon photonics and co-packaged optics (CPO) in AI data centers.

Applied Optoelectronics, Inc. (NASDAQ:AAOI) said the laser addresses situations where lasers with wider linewidths or higher noise figures limit performance. It can feed directly into semiconductor chip scale systems to provide hyperscalers with a robust, high-performance light source for CPO, silicon photonics, and other applications that demand stable single-wavelength precision and power.

While we recognize AAOI’s potential as an investment, our conviction lies in the belief that some AI stocks are more promising to deliver higher returns and have limited downside risk. If you’re looking for an extremely cheap AI stock that’s also a big beneficiary of Trump’s tariffs and onshoring, check out our free report on the best short term AI stock.

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Disclosure: no. This article is originally published in Monkey Insider.