Piper Jaffray analyst Troy Jensen downgraded Applied Optoelectronics (AAOI) to Neutral and cut his price target for the shares to $40 from $51. The shares closed Friday up 89c to $35.99. The analyst sees risk of margin compression amid increased competition and wouldn't be surprised to see gross margins trend down throughout 2018. He also points out that optical stocks typically perform better during upgrade cycles and sentiment for the 100G cycle has likely peaked. The industry will have to wait for the 400G cycle to drive meaningful revenue growth, margin expansion and stock price appreciation, Jensen tells investors in a research note. The analyst this morning also downgraded shares of Finisar (FNSR) and NeoPhotonics (NPTN) to Neutral.