From the start of June until now, the shares of Applied Optoelectronics Inc (NASDAQ:AAOI) have dropped by nearly 9% to $63.80. Yet this masks much more activity. During this same period AAOI stock hit nearly $100. Oh, and something else: for the year so far, the total return has been 172%!

Yes, it’s been a roller coaster.

But when taking a longer-term view on things, AAOI stock still looks like a pretty good bet. The company, which is a top provider of fiber-optic access network products, is poised for continued growth — both on the top and bottom lines.

OK, then, so why was there a big drop in AAOI stock during the summer? Well, the catalyst was the second quarter earnings report.

Interestingly enough, there was much to like about it. Revenues soared by 112% to $117.4 million and 22% on a quarter-over-quarter basis. The adjusted earnings also came to $1.54 per share. The Street consensus, on the other hand, was for revenues of $116 million and earnings of $1.32 per share.

But of course, the real problem for AAOI stock was the guidance. For Q3, the company forecasted revenues of $111 million, which was below the analysts’ projection of $123 million.

This big-time miss was definitely a shocker.

Let’s face it, given the momentum of AAOI stock, the shares were essentially priced for perfection. Yet the Q3 forecast still looks more like a temporary speed bump. Keep in mind that AAOI has long sales cycles, which involve large orders. So it is natural for there be some lumpiness in regard to revenues.

It is also important to consider that the company is undergoing a significant change in its product line — that is, from 40 gigabit systems to those with 100 gigabits. At the same time, AAOI has had to deal with manufacturing challenges because of the heavy demand for its offerings.

In other words, these are all typical “growing pains” for a tech company.

Secular Trends For AAOI Stock

AAOI certainly has a bold mission, which is to be the “leading provider of optical access products that enable the gigabit age.” For the most part, this is about capitalizing on some of the biggest trends in technology — like social media, cloud computing and streaming video. All these require sophisticated infrastructure systems that AAOI has been building for the past 20 years, such as optical devices, laser transmitters and fiber-optic transceivers.

Another key advantage is that the company is vertically integrated. This means that it not only develops the IP (intellectual property) but also owns its own state-of-the-art semiconductor fab, which allows for more seamless technologies.

As a testament to this strategy, AAOI has put together a roster of marquee customers, such as Amazon.com, Inc. (NASDAQ:AMZN), Microsoft Corporation (NASDAQ:MSFT) and Facebook Inc (NASDAQ:FB). These operators all need high-end technologies that allow for high-speed digital experiences. And this trend is likely to last for years to come.

Consider this from Applied Optoelectronics’ 10-K: “[T]here is an ongoing transition from the use of copper cable, typically at speeds up to 1 gigabit per second (Gbps), to optical fiber as a transport medium, typically providing speeds from 10 Gbps to 100 Gbps. In recent years, a number of leading internet companies have adopted more open internet data center architectures, using a mix of systems and components from a variety of vendors, and in some cases designing their own equipment. For these companies, compatibility of new networking equipment with legacy infrastructure is not as important, and consequently, these companies are more willing to work with non-traditional equipment vendors, which we believe creates an open and growing opportunity for optical device vendors.”

Bottom Line on AAOI Stock

Given that AAOI is in the midst of some major changes in its business, the volatility is likely to continue. But this could present an opportunity for investors. In fact, the current valuation is attractive, with the forward price-to-earnings multiple at a rock-bottom 11.

Basically, this seems to be factoring in the risks and short-term issues. In other words, for a very reasonable valuation, AAOI stock provides a great way to get exposure to some red-hot categories in tech.

Tom Taulli runs the InvestorPlace blog IPO Playbook and is also the author of High-Profit IPO Strategies, All About Commodities and All About Short Selling. Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.