POET Technologies Inc. (NASDAQ: POET) experienced a severe stock decline on Friday, with shares falling nearly 23% to $11.86 amid a broad selloff in the semiconductor sector. The stock traded in a wide range between $10.86 and $15.06, with volume surging to 57.1 million shares, reflecting heightened investor anxiety.
The company, a developer of photonic integrated circuits that use light for data transfer, has become a volatile test case for the AI-infrastructure trade. After announcing a $400 million capital raise and a $50 million initial order from Lumilens in May, shareholders are now grappling with execution risks while hoping for upside from optical data center links.
The broader market rout added to the pressure. The Nasdaq Composite fell 4.18%, the S&P 500 dropped 2.64%, and the Philadelphia Semiconductor Index posted its largest single-day percentage loss since March 2020, according to Reuters. Ryan Detrick, chief market strategist at Carson Group, told Reuters, “the dam just broke today,” while Ohsung Kwon, chief equity strategist at Wells Fargo, called the move “not the end of the semi bull market.”
POET's investor relations page still featured the May 18 press release announcing the closing of a $400 million registered direct offering. No new statement from the company addressed Friday's decline, leaving attention focused on recent developments: the Lumilens order, the financing, and prior issues with Marvell Technology (NASDAQ: MRVL).
The Lumilens order, announced May 15, was for initial purchases of EOI-based engines, with potential total purchases exceeding $500 million over five years. Lumilens CEO Ankur Singla stated, “GPU interconnects are emerging as the defining bottleneck for scaling AI,” underscoring the importance of data links between graphics processors in AI hardware.
The capital raise involved selling 19,047,620 common shares and warrants at $21.00 per unit. Each warrant allows the purchase of one share at $26.25 over three years. CEO Dr. Suresh Venkatesan said the company plans to increase wafer production and optical engine assembly “by roughly ten-fold” to support higher-volume manufacturing into 2027, adding that a “strong balance sheet enhances POET’s credibility.” However, the filing warned that heavy share sales could pressure the stock price.
Competitive signals remain mixed. Marvell, a key player in POET's narrative after acquiring Celestial AI, later canceled all purchase orders from Celestial, alleging POET violated confidentiality. This development, along with the broader semiconductor selloff that hit Nvidia (NASDAQ: NVDA) and Broadcom (NASDAQ: AVGO), has clouded the outlook.
The bear case centers on whether Lumilens and other customers will convert purchase orders into steady production revenue. Additional concerns include dilution from the capital raise, the Marvell cancellation, and tax-status issues. POET stated it believes it was a passive foreign investment company (PFIC) for 2025, a U.S. tax classification that can negatively impact U.S. holders. CFO Thomas Mika said the company does not expect to be a PFIC in 2026 and plans to redomicile in the U.S.
With the virtual annual general meeting scheduled for June 26, traders have limited catalysts until then. The focus now shifts to shipment updates, manufacturing ramp progress, and whether Friday's semiconductor decline was a temporary blip or the beginning of a deeper correction for the sector.
