Shares of Applied Optoelectronics (NASDAQ: AAOI) surged nearly 9% in pre-market trading on Thursday, after the fiber-optic networking company reported mixed third-quarter 2024 results but showed signs of improving demand for its products.

For the quarter ended September 2024, AAOI reported an adjusted loss per share of $0.21, missing analysts' expectations of a $0.17 loss. However, the company's revenue of $65.15 million exceeded the consensus estimate of $62.60 million, representing a 4.16% year-over-year increase.

Despite the larger-than-expected loss, investors appeared to be focusing on AAOI's better-than-anticipated revenue performance, which could signal improving demand for its products. The pre-market surge suggests that the market is optimistic about the company's revenue growth prospects, as it continues to navigate a challenging macroeconomic environment.

Following the earnings release, analysts noted that AAOI's revenue beat and positive year-over-year growth provided a positive signal to investors, who seem to be prioritizing the company's revenue trajectory over short-term profitability concerns. Additionally, AAOI provided a promising revenue outlook for the fourth quarter, expecting revenue in the range of $94 million to $104 million.

While the earnings miss was a setback, AAOI's revenue growth and guidance appeared to bolster investor confidence in the company's ability to drive further momentum in its top line. As the market continues to digest the company's results and outlook, AAOI's stock could remain volatile in the near term.