Applied Optoelectronics Inc. (NASDAQ:AAOI) shares fell sharply, dropping as much as 17.47%, after the company launched a $600 million at-the-market equity offering with Raymond James and Needham & Company, intensifying dilution concerns that had already cut into a large year-to-date rally. The program, announced August 21, lets AAOI sell common stock in tranches at prevailing market prices with no obligation to issue shares and the right to pause or terminate sales, with proceeds aimed at flexible financing and business expansion, including capacity linked to strong 800G and 1.6T demand. Selling pressure spilled across the optical complex: Roundhill’s optical-module ETF LYTE fell 7.3%, pure-play photonics ETF FOTO dropped 5.8%, Lumentum fell 7.5%, Coherent 8.4%, Ciena 7.3%, Marvell 6.9% and Corning 4.4%. Earlier tape had shown AAOI down about 12% near $109.94 after a 258% year-to-date gain, following record Q2 revenue of $191.92 million and heavy prior ATM and capex activity as management said demand outpaces supply through mid-2027.