AAOI vs VIAV: Which Is the Better Buy in 2026?
Last updated August 2026
Short answer
AAOI and VIAV are similarly sized, but AAOI trades noticeably cheaper on forward earnings (19.77x vs 28.75x): the market is paying up for VIAV's profile and pricing AAOI more conservatively, or for faster growth. Which you prefer comes down to the drivers you believe, and whether adding either over-concentrates what you already own.
AAOI vs VIAV: the tie-breaker metrics
Same yardstick, side by side (as of August 2026). Valuation lined up like this is most meaningful for two names in the same corner of the market, which these are. Figures are approximate; verify before investing.
| Metric | AAOI | VIAV | What it tells you |
|---|---|---|---|
| Market cap | $7.57B | $9.12B | Size. The larger name is the incumbent; the smaller has more room to grow and more to prove. |
| Forward P/E | 19.77 | 28.75 | Valuation on next year's expected earnings, the same yardstick for both. Lower is cheaper for that growth; higher means the market is paying up. |
| Beta | 3.69 | 1.19 | Volatility vs the market. Above 1 swings harder than the index; below 1 is steadier. Higher beta means bigger drawdowns to hold through. |
| Price vs 52-week range | 35% of range | 54% of range | Where today's price sits between the 52-week low and high. Near the high is momentum with less margin of safety; near the low is out of favor or a discount, depending on why. |
| Price / book | 6.73 | 10.21 | How much you pay over book value. Very high can signal an asset-light, high-return business or a rich price. |
Reading it: AAOI is the cheaper of the two on forward earnings, but cheaper is not the same as better. Pair the valuation with growth (how far the forward P/E sits below the trailing P/E) and risk (beta) before you decide.
Before you buy: how AAOI and VIAV affect your concentration
The metrics above tell you which is the marginally better business. The bigger risk for most people is not picking the slightly worse stock, it is over-concentrating. AAOI and VIAV share themes, so owning both, or adding either to what you already hold, can quietly push a large share of your portfolio into one bet.
This is the part a generic comparison page cannot answer, because it depends on what you own. Connect your brokerage and Walnut shows your real, combined AAOI and VIAV exposure, flags overlap with your existing positions, and tells you if adding one would tip you past a concentration you are comfortable with, read-only by default, with your login staying at your broker. Walnut is not an investment adviser.
What does Applied Optoelectronics (AAOI) do?
Applied Optoelectronics, Inc. designs and manufactures optical communications products across two main markets: data-center transceivers (including 400G, 800G, and emerging 1.6T modules used in AI and cloud networks) and cable television (CATV) equipment such as DOCSIS 4.0 amplifiers and lasers. The company is vertically integrated, producing many of its own lasers and optical subassemblies, and positions itself as a US-based alternative to Asian optical suppliers for hyperscale customers building AI infrastructure.
What does VIAVI Solutions (VIAV) do?
VIAVI Solutions (NASDAQ: VIAV) makes test, monitoring, and assurance instruments plus optical technologies used to build and secure communications networks, data centers, and military, aerospace, and railway systems. It runs two segments: Network and Service Enablement (NSE), which sells lab and field test gear for fiber, 5G, and high-speed ethernet, and Optical Security and Performance Products (OSP), which supplies anti-counterfeiting pigments for currency and optical filters for consumer electronics and 3D sensing. The company also acquired high-speed ethernet testing assets from Spirent Communications and Inertial Labs in 2025 to deepen its data-center and position-navigation-timing exposure.
AAOI vs VIAV: how do they differ?
Both fit overlapping themes, but they are not interchangeable. The useful comparison is which set of drivers and risks you want exposure to.
- AAOI drivers: 800G and 1.6T data-center ramp; Hyperscale customer commitments.
- VIAV drivers: AI and data-center testing demand; Aerospace, defense, and PNT.
Which fits which kind of investor
A faster-growing, richer-valued name usually swings harder, so it suits a longer horizon and a higher tolerance for volatility; a steadier, more cash-generative business suits a more conservative or income-minded investor. The honest test is which set of risks you could hold through a drawdown: Customer concentration is severe: a small number of hyperscalers have historically driven the large majority of revenue, so a single procurement shift could sharply cut sales, as an earlier Amazon fallout showed. For VIAV, vIAVI's revenue is cyclical and tied to network operator, hyperscaler, and government capital spending, any of which can pause.
AAOI or VIAV: which should you pick?
AAOI vs VIAV: the full fundamentals
AAOI. AAOI trades at a high price-to-sales multiple (well above the broader communications-equipment average), reflecting expectations for the AI-driven 800G and 1.6T ramp rather than current earnings. It is smaller than optical peers like Coherent, Lumentum, and Fabrinet, so its valuation is more sensitive to a few large orders and to shifts in hyperscaler spending.
VIAV. VIAVI's fiscal third quarter of 2026 (ended March 28, 2026) showed revenue of about $406.8 million, up roughly 42.8 percent year over year, with non-GAAP operating margin near 21 percent. Trailing GAAP earnings have been negative, so the headline valuation leans on forward non-GAAP estimates rather than trailing profits. Q4 FY2026 guidance called for revenue of about $427 million to $437 million.
Headline figures (approximate, July 2026): AAOI shows revenue (ttm) ~$500-560 million, q1 2026 revenue ~$151 million (up ~51% YoY), 2026 revenue guidance ~$1.1 billion+, non-gaap gross margin ~29%; VIAV shows market cap ~$9.7B, revenue (ttm) ~$1.05B, q3 fy2026 revenue ~$406.8M (+42.8% YoY), q3 fy2026 non-gaap eps ~$0.27.
The bottom line: AAOI vs VIAV
AAOI and VIAV are related but distinct: same themes, different businesses and risks. Neither wins in the abstract; the right pick is whichever thesis you actually believe, sized so you are not over-concentrated in one theme. Walnut can show your combined AAOI and VIAV exposure against your real portfolio. It is not an investment adviser.
Wondering how AAOI or VIAV fits the portfolio you already own? Walnut is an AI investing app that connects your brokerage read-only and answers questions like that about your actual holdings: overlap, concentration, and how each position tracks the S&P 500. Compare the best AI portfolio analyzers or see the best AI investing apps in 2026.
Investing in Applied Optoelectronics with AI
Connect the broker you already use and ask Walnut's AI how AAOI fits what you actually hold: whether you own it already through a fund, what it would do to your concentration, and how it has tracked the S&P 500. Read-only by default, and you approve anything before it reaches your broker.
FAQ
What is the difference between AAOI and VIAV?
+
Applied Optoelectronics, Inc. VIAVI Solutions (NASDAQ: VIAV) makes test, monitoring, and assurance instruments plus optical technologies used to build and secure communications networks, data centers, and military, aerospace, and railway systems. They show up together because they share investment themes, but they are different businesses, so the better fit depends on which thesis you are expressing.
Is AAOI or VIAV the better stock?
+
Neither is universally better; they suit different views and risk levels. Walnut is informational, not investment advice. Compare what each does, the tie-breaker metrics above, and the risks, then decide which fits your thesis and what you already own.
Which is cheaper, AAOI or VIAV?
+
On forward P/E (as of August 2026), AAOI trades at 19.77x and VIAV at 28.75x, so AAOI is the cheaper of the two on next year's expected earnings. A lower multiple is not automatically the better buy: a richer valuation can be justified by faster growth, and a lower one can reflect real risk. Weigh the multiple against how fast each business is compounding.
Should you own both AAOI and VIAV?
+
Because they share themes, owning both concentrates you in that theme. That can be intentional (a focused bet) or accidental (less diversification than it looks). Walnut can show your combined exposure across both, and whether adding either over-concentrates you, before you buy.
What are the risks of AAOI vs VIAV?
+
AAOI: Customer concentration is severe: a small number of hyperscalers have historically driven the large majority of revenue, so a single procurement shift could sharply cut sales, as an earlier Amazon fallout showed. The company remains unprofitable at the net level with gross margins near 29%, and heavy capital spending plus a $250 million ATM equity program and convertible notes create meaningful dilution and balance-sheet risk. Competition from much larger and better-funded optical vendors, rapid technology transitions (400G to 800G to 1.6T), and the possibility that hyperscalers slow AI capex all add uncertainty. The stock is highly volatile and trades at a rich price-to-sales multiple that assumes flawless execution. VIAV: VIAVI's revenue is cyclical and tied to network operator, hyperscaler, and government capital spending, any of which can pause. The stock has re-rated sharply, so a forward P/E in the low 40s (as of July 2026) leaves little room for a demand slowdown. The Spirent and Inertial Labs deals added debt, funded partly by a term loan and convertible notes, so integration missteps or higher rates would pressure the balance sheet even after recent prepayments. GAAP profitability has been negative on a trailing basis, and the OSP segment's program-based orders can swing quarter to quarter.
Walnut is informational, not investment advice. This page is descriptive and not a recommendation to buy or sell AAOI or VIAV; figures are approximate and dated (as of August 2026). Verify current data before investing.