Applied Optoelectronics shares drop 12% after $600M equity raise plan sparks sector selloff

Applied Optoelectronics announced a $600 million at-the-market equity offering, causing its shares to fall 12% amid concerns of dilution. The company plans to use the funds for expansion and debt repayment, supporting strong demand that outpaces production capacity through mid-2027. This move also triggered declines in peer optics stocks like Lumentum and Coherent, though their fundamentals remain strong. Investors should watch for stabilization as the market digests the new offering and await further updates from management.