POET Stock: Could POET Disrupt the Photonics Market?

These days, everybody loves a scrappy photonics play.

Toronto-based POET Technologies [POET] certainly fits the bill. Despite its diminutive size – a market cap well below $2bn, even with recent stock gains – the firm has attracted increased interest from retail investors amid a surge in the valuation of artificial intelligence (AI) infrastructure stocks. Bulls point to the potentially disruptive nature of its technology as companies of all sizes race to build, outfit and maintain the data centres supporting the AI boom. 

POET’s central innovation is its Optical Interposer, which integrates electronics and photonics into a single multi-chip module, using what it calls the “semiconductorization of photonics”. Compared to traditional photonics solutions, this reportedly lowers manufacturing costs and energy consumption, while providing the ability to scale manufacturing and increased interconnectivity between devices. 

A recent mix of tailwinds and setbacks, however, has given both the POET share price and many investors whiplash. In the wake of several significant developments for this smaller AI pure-play stock, CMC Aureon investigates if there is any rhyme or reason to the investment case for POET Technologies. 

Contract conundrum

The latest battery of updates from POET began at the end of April, when the firm disclosed the cancellation of purchase orders from Celestial AI, following the latter’s acquisition by Marvell Technology [MRVL] in February. The orders included initial production units disclosed in April 2023. While the value of the orders was not disclosed, the company highlighted a $5m order from another customer, as if to soften the blow. Investors were not mollified, though, and the stock fell nearly 50% on the day of the announcement.

The company did not hang around. On 14 May, POET announced a purchase order from AI interconnects firm Lumilens for the manufacturing of electrical-optical interposer-based engines. Initially set at $50m, the order could lead to purchases of $500m or more over the next five years. 

POET’s Q1 2026 earnings, released the same day, turned out to be a mixed bag. Revenue of $500,000 beat estimates and represented 201% year-on-year growth, but a GAAP loss of $0.08 per share missed Wall Street estimates by $0.03. Net loss came in at $12.3m, compared to a net loss of $42.7m in the previous quarter and net income of $6.3m in the year-ago quarter. Cash flow from operations improved slightly, at -$8.8m in Q1 2026 compared to -$8.9m in the year-ago quarter. Management highlighted its partnerships with firms such as LITEON and Lessengers and improved strategic position within the AI data centre ecosystem, as well as plans to domicile its headquarters in the US. 

The next day, POET announced an agreement to issue and sell 19.05m common shares and a warrant to an undisclosed institutional investor. The sale closed on 18 May, and the resulting $400m investment is expected to be used for a “roughly ten-fold” expansion in both wafer production and optical engine assembly, as well as potential acquisitions, CEO Suresh Venkatesan said in the accompanying press release. 

Waves of speculation

POET stock is no stranger to volatility. 

Shares have experienced various peaks and troughs since the company debuted on the Nasdaq in 2008. It marked an all-time high at over $26.00 in April 2014 – also sparked, unsurprisingly, by speculation over the potentially disruptive role of its photonics platform, rather than any actual fundamentals – but quickly pulled back to a level well below the $10 mark, where it has largely traded since. Increased investor interest in photonics and pure-play AI infrastructure stocks in late 2025 and early 2026 has fuelled another such spike, though mixed earnings and the Marvell contract cancellation have ensured that dips are as extreme as the rallies. 

As of the 19 May close, POET shares were trading at $13.07, up 106.48% in the year to date and up 177.49% in the past 12 months, but down 4.81% in the past week.

AI infrastructure darlings: POET vs COHR vs WOLF

POET’s relatively small size, unprofitability and narrow focus make it hard to compare the firm with larger, more diversified players that have benefitted from the AI boom.

Coherent [COHR] resembles POET in that it manufactures optoelectronic components for the AI data centre market, but it boasts a wider sector reach and portfolio than POET, and dwarfs the smaller firm in terms of market cap. In its Q3 FY 2026 earnings report, released on 6 May, it logged revenue of $1.81bn, up 21% y/y. EPS of $1.41 beat Wall Street expectations by $0.03 as the company continues to ramp up capital investment in line with robust demand for its photonics portfolio.  

Mid-cap chipmaker Wolfspeed [WOLF], meanwhile, resembles POET in terms of size, shaky financial footing and disruptive potential – the firm manufactures silicon carbide semiconductors, which are expected to dominate the power electronics industry by 2026, according to a recent forecast from IDTechEx. While pre-profit, Wolfspeed has made significant strides to recover after filing from bankruptcy in June 2025. In Q3, though it missed estimates for both revenue and EPS, it closed a $476m debt refinancing deal and reduced total debt by $97m.  

Here is how the three stocks compare in terms of fundamentals: 

Source: Yahoo Finance

POET stock: The investment case

The bull case for POET Technologies

Much of the bull case for POET Technologies rests on its unique Optical Interposer technology, which could displace more traditional photonics technologies if it sees sufficient customer uptake. The company is future-focused, providing chip-to-chip optical interconnects when AI’s demand for compute seems insatiable, and networking applications in excess of 1.6T. Ultimately, its aim to bring “semiconductor-style manufacturing discipline to optical engines” – as CEO Venkatesan put it in the Lumilens order press release – could pay off, as it represents a one-of-a-kind solution in a market where demand is likely to outstrip supply in the near to medium term. 

While it has historically been a favourite of retail investors, POET has received limited analyst coverage, with only one rating on Yahoo Finance in May – a ‘buy’. 

The bear case for POET Technologies

POET Technologies remains a high-risk play, even in the context of the AI ecosystem, as it remains pre-profit, with the majority of its funding coming from private capital, rather than operations. As a pure-play AI company, its fortunes are largely tied to the success of a single revenue stream, even if its platform could have wider applications in the medium to long term. 

Some observers have also expressed concern that even the $400m financing announced on 15 May could dilute the firm’s equity base, reducing the upside investors actually walk away with. Additionally, given a historical pattern of spikes driven by rising enthusiasm and equally sharp sell-offs, POET stock could well be on its way down again after the most recent bout of interest. The average target price of $8.20 represents a decrease of 37.26% from the 19 May closing price. 

Conclusion

Investor interest surrounding POET Technologies remains speculative, based on disruptive potential rather than any clear improvement in fundamentals. The recent Marvell contract cancellation emphasises the execution risk the company faces, which is unusually high even for the risk-heavy AI infrastructure sector. However, the company does offer a unique photonics solution, and could leverage its partnerships and new funding to secure a more dominant position in an already booming market.

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