Sifting through countless of stocks in the Communications Equipment industry can be tedious, and sometimes two stocks are just too similar to judge which is the better investment. If you’re on the fence about investing in Applied Optoelectronics, Inc. or Digi International Inc. because you’re not sure how they measure up, it’s important to compare them on a few factors before making your decision.

Read on to learn how Applied Optoelectronics, Inc. and Digi International Inc. compare based on key financial metrics to determine which better meets your investment needs.

About Applied Optoelectronics, Inc. and Digi International Inc.

Applied Optoelectronics, Inc. engages in the design, manufacture, and sale of fiber-optic networking products in the United States, Taiwan, and China. The company offers optical modules, optical filters, lasers, laser components, subassemblies, transmitters and transceivers, turn-key equipment, headend, node, and distribution equipment, as well as amplifiers. It sells its products to internet data center operators, cable television, telecom equipment manufacturers, fiber-to-the-home, and internet service providers through its direct and indirect sales channels. Applied Optoelectronics, Inc. was incorporated in 1997 and is headquartered in Sugar Land, Texas.

Digi International Inc. provides business and mission-critical Internet of Things (IoT) connectivity products, services, and solutions in the United States, Europe, the Middle East, Africa, and internationally. It operates through IoT Products & Services, and IoT Solutions segments. The company offers cellular routers for mission-critical wireless connectivity; cellular modules to embed cellular communications abilities into the products to deploy and manage intelligent and secure cellular connected products; console servers to provide secure and remote access to network equipment in data centers and at edge locations; and radio frequency products, including embedded wireless modules, off-the-shelf gateways, modems, and adapters under the Digi XBee brand. It also provides embedded system products under the Digi Connect, and ConnectCore brands; and infrastructure management products comprising serial servers, which offers serial port-to-Ethernet integration of devices into wired Ethernet networks; and universal serial bus solutions. In addition, it provides Digi Remote Manager and Lighthouse, a recurring revenue cloud-based service that offers a secure environment for customers to manage connected device deployment and network devices; SmartSense by Digi for monitoring wirelessly the temperature of food and other perishable or sensitive goods, monitoring facilities or pharmacies by tracking the completion of operating tasks by employees, and quality control and incident management in food service, healthcare, and transportation/logistics industries; and Ventus for MNaaS solutions. Further, the company provides professional services, such as site planning, implementation management, application development, and customer training; data plan subscriptions; and enhanced technical support services, as well as Digi Wireless Design Services. Digi International Inc. was incorporated in 1985 and is headquartered in Hopkins, Minnesota.

Latest Communications Equipment and Applied Optoelectronics, Inc., Digi International Inc. Stock News

As of July 31, 2026, Applied Optoelectronics, Inc. had a $7.6 billion market capitalization, compared to the Communications Equipment median of $376.1 million. Applied Optoelectronics, Inc.’s stock is up 170.6% in 2026, down 5.8% in the previous five trading days and up 309.02% in the past year.

Currently, Applied Optoelectronics, Inc. does not have a price-earnings ratio. Applied Optoelectronics, Inc.’s trailing 12-month revenue is $507.0 million with a -8.5% net profit margin. Year-over-year quarterly sales growth most recently was 51.3%. Analysts expect adjusted earnings to reach $0.888 per share for the current fiscal year. Applied Optoelectronics, Inc. does not currently pay a dividend.

As of July 31, 2026, Digi International Inc. had a $2.6 billion market cap, putting it in the 57th percentile of all stocks. Digi International Inc.’s stock is up 61.1% in 2026, up 4.1% in the previous five trading days and up 109.81% in the past year.

Currently, Digi International Inc.’s price-earnings ratio is 61.6. Digi International Inc.’s trailing 12-month revenue is $475.1 million with a 9.1% net profit margin. Year-over-year quarterly sales growth most recently was 25.1%. Analysts expect adjusted earnings to reach $2.476 per share for the current fiscal year. Digi International Inc. does not currently pay a dividend.

How We Compare Applied Optoelectronics, Inc. and Digi International Inc. Stock Grades

Stock evaluation requires access to huge amounts of data and the knowledge and time to sift through it all, make sense of financial ratios, read income statements and analyze recent stock movements. AAII created A+ Investor, a robust data suite that condenses data research in an actionable and customizable way suitable for investors of all knowledge levels, to help investors streamline and work through such data.

AAII’s proprietary stock grades come with A+ Investor. These offer intuitive A‐F grades for each of five key investing factors: value, growth, momentum, earnings estimate revisions and quality. Here, we’ll take a closer look at Applied Optoelectronics, Inc. and Digi International Inc.’s stock grades to see how they measure up against one another.

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Applied Optoelectronics, Inc. and Digi International Inc.’s Quality Grades

Company	Ticker	Quality
Applied Optoelectronics, Inc.	AAOI	F
Digi International Inc.	DGII	B

Like the Value Grade, AAII’s A+ Investor Quality Grade comes from the percentile rank of key metrics. Specifically, the Quality Score is the percentile rank of the average of the percentile ranks of return on assets (ROA), return on invested capital (ROIC), gross profit relative to assets, buyback yield, change in total liabilities to assets, accruals, Z double prime bankruptcy risk (Z) score and the F-Score.

The score is variable, meaning it can consider all eight measures or, should any of the eight measures not be valid, the remaining measures that are valid. To be assigned a Quality Score, stocks must have a valid (non-null) measure and corresponding ranking for at least four of the eight quality measures.

The Quality Score is used to assess the underlying “quality” of a particular stock. A higher-quality stock possesses traits associated with upside potential and reduced downside risk. Backtesting of the Quality Grade shows that stocks with higher grades, on average, outperformed stocks with lower grades over the period of 1998 through 2019.

Stocks receive better grades (higher scores) for having higher scores for the quality subcomponents and worse grades (lower scores) for lower scores for the subcomponents.

Applied Optoelectronics, Inc. has a Quality Score of 16, which is Very Weak. Digi International Inc. has a Quality Score of 76, which is Strong.

The Quality Grade Winner: Digi International Inc.

As you can clearly see from the Quality Grade breakdown above, Digi International Inc. has a better overall quality grade than Applied Optoelectronics, Inc.. For investors who are looking for companies with higher quality than others in the same industry, Digi International Inc. could be a good stock to add to their portfolios. However, it’s important for investors to analyze multiple factors based on a wide range of metrics before deciding whether to buy.

Applied Optoelectronics, Inc. and Digi International Inc.’s Momentum Grades

Company	Ticker	Momentum
Applied Optoelectronics, Inc.	AAOI	A
Digi International Inc.	DGII	A

Momentum grades help to uncover stocks experiencing anomalously high rates of return; research finds that stocks with high relative levels of momentum tend to outperform, whereas those with low levels of momentum tend to continue underperforming. Momentum is based on the price change of a stock over a specified period relative to all other stocks.

Typically, AAII looks at the weighted relative strength over the trailing four quarters. The weighted four-quarter relative strength rank is the relative price change for each of the past four quarters. The most recent quarterly price change is given a weight of 40% and each of the three previous quarters are given a weighting of 20%.

Applied Optoelectronics, Inc. has a Momentum Score of 99, which is Very Strong. Digi International Inc. has a Momentum Score of 90, which is Very Strong.

The Momentum Grade Winner: It’s a Tie!

Looking at the Momentum Grade breakdown above, both Applied Optoelectronics, Inc. and Digi International Inc. have a grade of A. For those who focus solely on a company’s momentum, further research will need to be conducted into both companies to see if they fit your individual needs as an investor.

Applied Optoelectronics, Inc. and Digi International Inc.’s Estimate Revisions Grades

Company	Ticker	Earnings Estimate
Applied Optoelectronics, Inc.	AAOI	C
Digi International Inc.	DGII	B

Earnings estimate revisions scores consider the magnitude of a company’s earnings surprise in its last two reported fiscal quarters. Often, positive surprises beget further positive surprises‐or at least continued sales growth (the exact opposite is generally true, too).

Estimate revisions offer an indication of what analysts are thinking about the short-term prospects of a firm. Estimate revisions are based on the statistical significance of a firm’s last two quarterly earnings surprises and the percentage change in its consensus estimate for the current fiscal year over the past month and past three months.

Applied Optoelectronics, Inc. has a Earnings Estimate Score of 50, which is Neutral. Digi International Inc. has a Earnings Estimate Score of 62, which is Positive.

The Earnings Estimate Revisions Grade Winner: Digi International Inc.

As you can clearly see from the Earnings Estimate Revisions Grade breakdown above, Digi International Inc. has a better Earnings Estimate Revisions Grade than Applied Optoelectronics, Inc.. For those who are specifically looking for companies with better short-term prospects when compared to other companies in the same industry, Digi International Inc. could be a good stock to invest in. However, it’s important to analyze multiple factors based on a wide range of metrics before deciding whether to buy.

Other Applied Optoelectronics, Inc. and Digi International Inc. Grades

In addition to Estimate Revisions, Quality and Momentum, A+ Investor also provides grades for Value and Growth.

Growth investing builds on the idea that stocks of companies exhibiting strong, consistent and prolonged growth outperform those of slower-growth companies. AAII measures growth through consistency of annual sales growth, five-year sales growth rankings adjusted for extreme levels, and consistency of positive annual cash from operations.

Successful stock investing involves buying low and selling high, so stock valuation is an important consideration for stock selection. Buying stocks that are going to go up typically means buying stocks that are undervalued in the first place, although momentum investors may argue that point.

These 2 key factors, when combined with the above, provide a holistic view into a particular stock. Further, by joining A+ Investor you can see whether Applied Optoelectronics, Inc. and Digi International Inc. pass any of our 60+ stock screens that have outperformed the market since their creation.

So, Which Is the Better Investment, Applied Optoelectronics, Inc. or Digi International Inc. Stock?

Overall, Applied Optoelectronics, Inc. stock has a Momentum Score of 99, Estimate Revisions Score of 50 and Quality Score of 16.

Digi International Inc. stock has a Momentum Score of 90, Estimate Revisions Score of 62 and Quality Score of 76.

Comparing Applied Optoelectronics, Inc. and Digi International Inc.’s grades, scores and metrics can act as a solid basis to determine whether they may be a good investment or not. You’ll also want to look at your portfolio’s asset allocation as well as your risk tolerance and financial goals to see if either of these stocks would make a good fit for you. AAII can help you figure out which investments align with your individual needs and preferences.

Investors are encouraged to do their own due diligence and research. In this way, individuals can effectively become managers of their own assets‐without having to rely on others for financial independence. You can count on AAII for timeless articles on financial planning and stock-picking, unbiased research and actionable analysis.

A+ Investor adds to our qualitative teaching with a powerful data suite to help you whittle down investment choices to find stocks, exchange-traded funds (ETFs) or mutual funds that meet your needs.

AAII Disclaimer

We make no representations or warranties that any investor will, or is likely to, achieve profits similar to those shown, because past, hypothetical or simulated performance is not necessarily indicative of future results. Before making an investment decision, you should consider your circumstances and whether the information on our content is applicable to your situation. This information was prepared in good faith, and we accept no liability for any errors or omissions. The full disclaimer can be read here.