On a generally bullish day for the market, this growth stock headed south. Did this AI infrastructure company have something disastrous to report?While shares of Poet Technologies (POET 5.02%) stock have surged higher throughout the week, investors are slowing their buying activity today. Lest investors fear that the company, a designer of optical engines, had some troubling news to report, there was no such thing. In fact, there appears to be no apparent cause for the stock's decline. As of the market's cl ...

POET Technologies Inc. (NASDAQ:POET) is one of the best AI stocks to buy according to analysts. On August 29, POET Technologies Inc. announced a partnership with NTT Innovative Devices Corporation, which is a subsidiary of Japan’s leading telecom company, to develop advanced optical engines. The collaboration supports next-gen mobile networks that will enable widespread use of AI applications on mobile devices. The development will focus on a 100G Bidirectional Optical Engine for mobile front-haul network ...

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].