11 Fastest Growing Small Cap Stocks to Buy

5. Applied Optoelectronics, Inc. (NASDAQ:AAOI)

Quarterly Revenue Growth (yoy): 137.90%

Upside Potential as of September 01, 2025: 12.40%

Applied Optoelectronics, Inc. (NASDAQ:AAOI), announced on August 27, 2025, that it is in an Equity Distribution Agreement with Raymond James & Associates, Inc. and Needham & Company, LLC. This means that the company can now raise up to $150 million worth of capital through the sale of common stock via these agents.

This deal allows Applied Optoelectronics, Inc. (NASDAQ:AAOI) to issue shares opportunistically, given the market environment. As the company moves towards higher capacity building for its transceiver offerings, the arrangement explicitly outlines agent compensation, reimbursement terms, standard termination, and indemnification provisions.

Many believe 2026 to be the inflection point for Applied Optoelectronics, Inc. (NASDAQ:AAOI), with the production of its high-speed transceiver to accelerate in the next few quarters and a strong outlook for its CATV demand. If we examine the company’s comparative returns, to say we’re impressed would be an understatement. While the three-year return delivered by the S&P 500 (^GSPC) stands at 60.28%, AAOI returned a stellar 891.80%.

Applied Optoelectronics, Inc. (NASDAQ:AAOI), based in Texas, is a manufacturer and seller of fiber-optic networking products. With a strong presence in the United States, Taiwan, and China, the company offers laser components, amplifiers, optical filters, and turn-key equipment, among others.