POET Technologies (NASDAQ: POET) saw its shares plunge roughly 13% to $10.65 late Tuesday, caught in a broader downturn for AI-related semiconductor names. The stock opened at $12.25, reached a session high of $12.77, and bottomed out at $10.12 on heavy volume exceeding 36 million shares.
The decline comes as renewed class-action reminders and lingering concerns over an April order cancellation by Marvell Technology (NASDAQ: MRVL) and Celestial AI kept legal and execution risks front and center. These worries overshadowed a $50 million initial order from Lumilens and a recently completed $400 million registered direct offering.
Legal and Execution Risks Weigh
Law firms have intensified pressure on POET investors this week, highlighting upcoming deadlines for lead-plaintiff status in class-action lawsuits. Portnoy Law set a June 23 deadline for investors who bought shares between April 1 and April 27, while Rosen Law announced a June 29 cutoff. The Rosen suit alleges that POET and CFO Thomas Mika made misleading statements regarding the company's PFIC tax status, which could increase tax burdens for certain U.S. holders. None of these claims have been tested in court.
POET's legal troubles trace back to April 27, when the company disclosed that Marvell Technology, which had acquired Celestial AI, canceled all purchase orders related to Celestial—including first production units POET had previously highlighted. Marvell alleged that POET breached confidentiality by sharing information about those orders and shipments. POET stated it continues to work on key milestones and aims to deliver on another customer order worth approximately $5 million.
Lumilens Deal and Financing Provide Some Support
Despite the headwinds, bulls remain anchored to the Lumilens agreement announced in May. Under the supply and joint-development deal, Lumilens placed an initial $50 million order, with the potential to exceed $500 million over five years. Ankur Singla, founder and CEO of Lumilens, described GPU interconnects as "the defining bottleneck for scaling AI." POET CEO Suresh Venkatesan said the partnership would advance the Optical Interposer platform into co-packaged optics.
POET also completed a $400 million registered direct offering in May, selling approximately 19.05 million shares and warrants to a single institutional investor. The warrants grant the investor the right to buy stock at a fixed price in the future. Venkatesan noted the funds would enable the company to boost manufacturing capacity "by roughly ten-fold" and support research, development, and working capital.
Broader Market and AI Chip Weakness
The broader market added to the pressure. The Invesco QQQ Trust (NASDAQ: QQQ) fell about 1.9%, while the iShares Semiconductor ETF (NASDAQ: SOXX) slipped nearly 4%. Marvell Technology dropped almost 11%, and Applied Optoelectronics (NASDAQ: AAOI) sank approximately 18%. Major U.S. indexes lost ground as tech selling intensified, geopolitical concerns rose, and traders awaited inflation data.
What's Ahead
Investors are watching the U.S. May consumer price index release on June 10 at 08:30 ET, with a higher-than-expected print potentially pressuring long-duration growth stocks. Producer price figures follow on June 11. POET will hold its virtual annual general meeting on June 26 at 1:00 p.m. Eastern.
For now, POET remains a story of execution risk versus potential reward. The Lumilens revenue depends on hitting key milestones—product development, qualification, and manufacturing scale-up—with engineering samples targeted for late 2026, full production in 2027, and hyperscaler rollouts thereafter. Any delays, legal setbacks, or inflation-driven rate concerns could keep the stock's rich valuation under pressure.
