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TAKEAWAYS KEY
- Shares of Applied Optoelectronics have risen more than 50% during premarket trading, after the optical products manufacturer announced that it had struck a contract with Amazon giving the tech giant the rights to buy almost eight million shares of the company’s stock.
- The company creates advanced optical components that are used in internet data centres, which are necessary to power AI technologies.
- Applied Optoelectronics' stock is up around 13% in the past 12 months through Friday.
Applied Optoelectronics’ (AAOI) stock is Surging more than 50% during premarket trading, after the optical product maker announced that it had struck a contract with Amazon (AMZN), giving the tech giant the rights to buy almost eight million shares.
In a filing with the U.S. Securities and Exchange Commission (SEC) Thursday, Applied Optoelectronics said it was issuing a warrant to the tech giant to buy up to 7.945 million shares Stocks are available.
"Subject to vesting and certain conditions set forth therein, the Warrant may be exercised, in whole or in part, at any time before 5:00 p.m., Seattle time, on March 13, 2035 at an exercise price of $23.6954 per share," the company said in its filing.
Applied Optoelectronics designs and manufactures optical products for broadband fiber access networks in internet data centers. It is headquartered in Sugar Land, Texas, and has engineering and manufacturing facilities in Taiwan and China, according to the company.
Amazon and other tech companies are investing heavily in their data centers to fuel the cloud computing boom and the demand for artificial intelligence.
Applied Optoelectronics shares Thursday’s closing price was $15.87, down 8%. They have risen by more than 13 percent in the last 12 months.
