POET Technologies Inc. (NASDAQ: POET) experienced a sharp decline on Friday, with shares dropping 23.36% to close at $11.86, and slipping further to $11.68 in after-hours trading. The selloff marked a tumultuous end to a volatile week, leaving the stock roughly 3.5% lower despite strong gains earlier in the period.
The decline was part of a broader rout in technology and semiconductor stocks, fueled by macroeconomic concerns and a stronger-than-expected U.S. jobs report that raised fears the Federal Reserve may maintain tighter monetary policy for longer. The Nasdaq Composite fell 4.18% on Friday, while the S&P 500 lost 2.64%, snapping a nine-week winning streak.
Market Context and Sector Weakness
The selloff was exacerbated by weakness in key AI-related names. Broadcom's softer guidance earlier in the week weighed on the chip sector, while Marvell Technology dropped 17% on Friday, despite its upcoming inclusion in the S&P 500. These larger players set a negative tone for smaller companies tied to data-center infrastructure, including POET.
Ryan Detrick, chief market strategist at Carson Group, described the day as one where the dam broke in tech and semiconductors, reflecting the extent of the selling pressure.
POET's Specific Challenges
POET's stock now trades well below the $21 per share price used in its May 18 $400 million share-and-warrant financing. The company's outlook remains highly dependent on its ability to secure customer orders and scale manufacturing. In May, POET and Lumilens announced a supply agreement for a new electrical-optical interposer, with an initial $50 million purchase order that could scale to over $500 million over five years. However, the company has cautioned that revenue from these orders depends on successful development, qualification, and production ramp-up.
CEO Suresh Venkatesan has highlighted plans to expand wafer production and optical engine assembly capacity tenfold, with a focus on facilities in Singapore and Malaysia. Engineering samples from the Lumilens program are expected in late 2026, with production aligned to hyperscale customer deployments in 2027.
Financial Fundamentals
POET's current financial base remains modest. The company reported first-quarter revenue of $503,389 from non-recurring engineering and product sales, alongside a net loss of $12.3 million, or $0.08 per share. This leaves the stock highly sensitive to news on customer qualifications and manufacturing execution.
The downside risks are clear: if products fail to meet performance standards, sales do not materialize, or operational challenges arise, the stock could face further pressure. In a weakening market, such uncertainties are often punished swiftly.
What to Watch Next Week
The upcoming week is packed with potential market-moving events. The May Consumer Price Index (CPI) is due Wednesday at 8:30 a.m. ET, and will be a key test for inflation expectations and Fed policy. Apple's developer conference on Monday and Adobe's earnings on Thursday add to the tech calendar.
Ohsung Kwon, chief equity strategist at Wells Fargo, has warned that the semiconductor sector was 'way overbought' and that markets may see more volatility unless CPI comes in soft. For POET, the next move could hinge on the inflation data and its impact on investor appetite for high-growth, AI-related names.
