Core Viewpoint - Poet Technologies experienced a 5% decline in stock price despite a generally bullish market, with no apparent negative news to justify the drop [1][2][5]. Company Performance - Shares of Poet Technologies fell by 5% to a current price of $6.05, with a market cap of $1 billion [4][7]. - The stock exhibited significant volatility, rising earlier in the week due to positive analyst sentiment and industry developments, but faced selling pressure later [3][5]. Market Context - The overall market was up, with the S&P 500 increasing by 0.2%, indicating that the decline in Poet Technologies' stock was not reflective of broader market trends [5]. - The trading volume for Poet Technologies was 8.4 million, compared to an average volume of 11 million, suggesting a notable level of trading activity [5]. Investor Sentiment - Despite the recent fluctuations, long-term investors are encouraged to maintain optimism regarding Poet Technologies' prospects, as the company is still in the early stages of developing AI connectivity solutions [6].

Core Insights - POET Technologies Inc. is recognized as a promising AI stock following its partnership with NTT Innovative Devices Corporation to develop advanced optical engines for mobile networks [1][3] - The collaboration aims to enhance mobile front-haul networks with a 100G Bidirectional Optical Engine, which is projected to deliver four times the bandwidth efficiency compared to existing devices [2][3] - The market for front-haul mobile networks is anticipated to grow at a CAGR of 14.2% through 2032, reaching a market size of $5.9 billion [3] Company Overview - POET Technologies designs, develops, manufactures, and sells semiconductor products and services across the US, Canada, Singapore, and China [4]

Investment Rating - The report maintains a "Buy" rating for Innolight and Eoptolink, with target prices updated to Rmb569 and Rmb472 respectively [15][26]. Core Insights - The networking sector is viewed positively due to optimistic growth forecasts for ASICs from Broadcom, strong long-term capital expenditure outlooks from Meta/OpenAI, and Oracle's significant datacenter expansion plans, indicating better demand visibility beyond 2026 [2][11]. - Despite a strong year-to-date rally, profit-taking is expected; however, the overall narrative remains compelling with a potential re-rating of transceiver companies to a PE of 20x+ [2][3]. - The report highlights a revision in industry demand estimates for 800G and 1.6T transceivers, projecting shipments of 56.3 million and 19.2 million respectively for FY27, reflecting a 42% year-over-year growth [11][29]. Summary by Sections Industry Outlook - The report emphasizes the longevity of demand in the transceiver market, driven by significant AI investments from major US cloud service providers [11]. - The expected rollout of 3.2T SiPh transceivers in late 2027 is noted as a key development, with 800G and 1.6T remaining dominant solutions in the interim [11][29]. Company Performance - Innolight is expected to secure a higher market share due to its strong R&D capabilities and its role as a key supplier for Oracle, alongside benefiting from the anticipated EML shortage [26][27]. - Eoptolink is projected to gain market share as it capitalizes on its LPO capabilities and the rapid build-out of Oracle's datacenter [15][26]. Financial Estimates - Revenue estimates for FY26 have been revised upwards, with a projected revenue of Rmb46.287 billion, reflecting a 20% increase from previous estimates [19][30]. - Net profit estimates for FY26 have also been increased to Rmb19.535 billion, a 22% rise compared to earlier projections [19][30]. Market Dynamics - The report discusses the competitive landscape, noting that while some tier-2 companies are planning to enter overseas markets, significant progress has yet to be observed [3]. - The potential for a 20-30% penetration of CPO in the market by 2029-2030 is highlighted, although major CSPs have not yet shown signs of mass adoption [3][11].