Applied Optoelectronics Inc. (AAOI): Mark Cuban Urges Focus on Foundational AI

Usman Kabir

Mon, May 18, 2026 at 4:28 PM EDT 2 min read

We just covered the Mark Cuban Stock Portfolio: 8 Best Stocks to Buy and Applied Optoelectronics, Inc. (NASDAQ:AAOI) ranks 6th on this list.

Applied Optoelectronics, Inc. (NASDAQ:AAOI) is one of the favorite AI stocks among billionaire investors. Mark Cuban, in an interview on the the Big Technology Podcast earlier this month, gave his view on the companies that provide the so-called plumbing for the AI world. During his interview, Cuban urged investors to focus not just on the software but on the physical hardware being set up for AI, noting that companies like Apple had “spent next to nothing” but had the foundation to plug and play AI into their devices. He decried businesses for spending trillions on building AI data center capacity and spending more cash than they had available, noting, “I understand why but I am not convinced that for all of them it is going to work”.

Applied Optoelectronics, Inc. (NASDAQ:AAOI) engages in the design, manufacture, and sale of fiber-optic networking products in the United States, Taiwan, and China. The company offers optical modules, optical filters, lasers, and laser components. Cuban has talked about how companies providing these services are going to get more business in the coming years as, “data center build gets faster, cheaper” at a pace that investors might not realize right now. Cuban is alluding to the classic argument that without owning the actual phones or computers people use, standalone software makers will struggle to survive, even in the AI age, because the competition is too fierce.

While we acknowledge the potential of AAOI as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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