SILC vs AAOI

For growth investors, Applied Optoelectronics, Inc.

(AAOI) is the stronger pick with 82. 8% revenue growth year-over-year, versus 6. 6% for Silicom Ltd. (SILC). Analysts rate Applied Optoelectronics, Inc. (AAOI) a "Buy" — based on 16 analyst ratings — the highest consensus in this comparison. The "better buy" depends entirely on your goals: growth investors should weight revenue trajectory, value investors should weight P/E and PEG, and income investors should weight dividend yield and streak.

Over the past 5 years, Applied Optoelectronics, Inc.

(AAOI) delivered a total return of +23. 7%, compared to +5. 5% for Silicom Ltd. (SILC). Over 10 years, the gap is even starker: AAOI returned +1591% versus SILC's +71. 3%. Past returns do not guarantee future results, and the stock with the higher historical return may already have its best growth priced in.

By beta (market sensitivity over 5 years), Silicom Ltd.

(SILC) is the lower-risk stock at 1. 34β versus Applied Optoelectronics, Inc. 's 4. 13β — meaning AAOI is approximately 208% more volatile than SILC relative to the S&P 500. On balance sheet safety, Silicom Ltd. (SILC) carries a lower debt/equity ratio of 9% versus 23% for Applied Optoelectronics, Inc. — giving it more financial flexibility in a downturn.

By revenue growth (latest reported year), Applied Optoelectronics, Inc.

(AAOI) is pulling ahead at 82. 8% versus 6. 6% for Silicom Ltd. (SILC). On earnings-per-share growth, the picture is similar: Applied Optoelectronics, Inc. grew EPS 85. 8% year-over-year, compared to 11. 8% for Silicom Ltd.. Over a 3-year CAGR, AAOI leads at 26. 9% annualised revenue growth. Higher growth typically commands a higher valuation multiple — check whether the premium P/E or P/S is justified by the growth rate using the PEG ratio.

Applied Optoelectronics, Inc.

(AAOI) is the more profitable company, earning -8. 4% net margin versus -18. 5% for Silicom Ltd. — meaning it keeps -8. 4% of every revenue dollar as bottom-line profit. Operating margin tells a similar story: AAOI leads at -12. 0% versus -19. 8% for SILC. At the gross margin level — before operating expenses — SILC leads at 30. 6%, reflecting greater pricing power or product mix advantage. Stronger margins indicate durable pricing power, lower cost of revenue, or higher mix of software/services. They are one of the clearest signs of business quality.

None of the stocks in this comparison currently pay a material dividend.

All are effectively zero-yield and should be held for capital appreciation rather than income.

For long-horizon retirement investors, Applied Optoelectronics, Inc.

(AAOI) is the stronger choice — it scores higher on the combination of lower volatility, dividend reliability, and long-term compounding (+1591% 10Y return). Both have compounded well over 10 years (AAOI: +1591%, SILC: +71. 3%), confirming both are viable long-term holds — but the lower-volatility option typically results in less emotional selling during corrections. Retirement portfolios generally favour predictability over maximum returns. Consult a financial advisor before making allocation decisions.

Both stocks operate in the Technology sector, making this a peer-level intra-sector comparison — the same macro tailwinds and headwinds will affect both.

In terms of investment character: SILC is a small-cap quality compounder stock; AAOI is a mid-cap high-growth stock. These fundamental differences mean investors should not choose between them on a single metric — the "better stock" depends entirely on which of these characteristics aligns with your investment strategy.