Applied Opt (AAOI)vsMicrosoft Corporation (MSFT)
AAOI
Applied Opt
$105.36
+2.00%
TECHNOLOGY · Cap: $9.47B
MSFT
Microsoft Corporation
$495.63
+0.65%
TECHNOLOGY · Cap: $3.68T
Smart Verdict
WallStSmart Research — data-driven comparison
Microsoft Corporation generates 55580% more annual revenue ($331.84B vs $595.97M). MSFT leads profitability with a 40.3% profit margin vs -9.6%. AAOI appears more attractively valued with a PEG of 0.78. MSFT earns a higher WallStSmart Score of 72/100 (B).
AAOI
Hold38
out of 100
Grade: F
MSFT
Strong Buy72
out of 100
Grade: B
Key Strengths & Concerns
Side-by-side fundamental analysis
Key Strengths
Revenue surging 86.4% year-over-year
Conservative balance sheet, low leverage
Growing faster than its price suggests
Mega-cap, among the largest globally
Every $100 of equity generates 30 in profit
Keeps 40 of every $100 in revenue as profit
Strong operational efficiency at 45.1%
Generating 19.6B in free cash flow
Conservative balance sheet, low leverage
Areas to Watch
0.0% earnings growth
ROE of -3.4% — below average capital efficiency
Negative free cash flow — burning cash
Distress zone — elevated risk
Expensive relative to growth rate
Moderate valuation
Trading at 8.3x book value
Comparative Analysis Report
WallStSmart ResearchBull Case : AAOI
The strongest argument for AAOI centers on Revenue Growth, Debt/Equity, PEG Ratio. Revenue growth of 86.4% demonstrates continued momentum. PEG of 0.78 suggests the stock is reasonably priced for its growth.
Bull Case : MSFT
The strongest argument for MSFT centers on Market Cap, Return on Equity, Profit Margin. Profitability is solid with margins at 40.3% and operating margin at 45.1%. Revenue growth of 17.7% demonstrates continued momentum.
Bear Case : AAOI
The primary concerns for AAOI are EPS Growth, Return on Equity, Free Cash Flow.
Bear Case : MSFT
The primary concerns for MSFT are PEG Ratio, P/E Ratio, Price/Book.
Key Dynamics to Monitor
AAOI profiles as a hypergrowth stock while MSFT is a growth play — different risk/reward profiles.
AAOI carries more volatility with a beta of 3.78 — expect wider price swings.
AAOI is growing revenue faster at 86.4% — sustainability is the question.
MSFT generates stronger free cash flow (19.6B), providing more financial flexibility.
Bottom Line
MSFT scores higher overall (72/100 vs 38/100), backed by strong 40.3% margins and 17.7% revenue growth. Both earn "Strong Buy" and "Hold" ratings respectively — the choice depends on your investment horizon and risk tolerance.
This analysis is generated from publicly available financial data. Not financial advice.
Applied Opt
TECHNOLOGY · COMMUNICATION EQUIPMENT · USA
Applied Optoelectronics, Inc. designs, manufactures, and sells various fiber optic networking products globally. The company is headquartered in Sugar Land, Texas.
Microsoft Corporation
TECHNOLOGY · SOFTWARE - INFRASTRUCTURE · USA
Microsoft Corporation is an American multinational technology company which produces computer software, consumer electronics, personal computers, and related services. Its best known software products are the Microsoft Windows line of operating systems, the Microsoft Office suite, and the Internet Explorer and Edge web browsers. Its flagship hardware products are the Xbox video game consoles and the Microsoft Surface lineup of touchscreen personal computers. Microsoft ranked No. 21 in the 2020 Fortune 500 rankings of the largest United States corporations by total revenue; it was the world's largest software maker by revenue as of 2016. It is considered one of the Big Five companies in the U.S. information technology industry, along with Google, Apple, Amazon, and Facebook.
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