Shares of Applied Optoelectronics Inc. (AAOI) skyrocketed on Wednesday, surging an impressive 55.25% as investors cheered the company's mixed third-quarter earnings report and promising outlook for robust demand from the artificial intelligence (AI) industry.

While the fiber-optic networking equipment manufacturer reported an adjusted loss of $0.21 per share, missing analysts' expectations of a $0.17 loss, its revenue of $65.15 million exceeded the consensus estimate of $62.60 million. This revenue beat, coupled with the company's bullish revenue guidance for the fourth quarter, fueled optimism among investors about AAOI's ability to capitalize on the rapidly growing demand for high-speed networking components for AI systems.

AAOI's management provided a fourth-quarter revenue guidance range of $94 million to $104 million, further bolstering investor confidence in the company's growth prospects. CFO Stefan Murry highlighted the robust and ongoing demand for AI-related networking gear, noting that the trend is expected to remain strong for an extended period as AAOI's existing large customers and new entrants continue to increase their orders.