Why did POET Technologies stock crash over 47% after Marvell canceled orders? Here's what investors are watching

POET stock crash today: Shares of POET Technologies Inc are under heavy pressure on Monday, with the stock dropping more than 47% after a major setback involving one of its key partnerships. The decline comes after Marvell Semiconductor Inc. canceled all outstanding purchase orders tied to Celestial AI, a company it recently acquired, effectively ending an important business relationship for POET, as per a report.

POET Technologies Stock Crashes Today After Partnership Fallout

The cancellation, communicated on April 23, centers on allegations that POET disclosed confidential information related to purchase orders and shipping details, as per a Benzinga report. These orders included initial production units that were first announced by POET in April 2023, making the development particularly significant for investors tracking the company’s progress.

Why Marvell’s Order Cancellation Is Hitting POET Shares Hard

The market reaction has been swift. POET shares were down more than 47% on Monday, reflecting concerns about the loss of a key customer and uncertainty over future revenue. This comes even as the stock had been trading near the upper end of its 52-week range of $3.78 to $15.50 and had surged 76% over the past week, as per an Investing.com report.

Impact of Losing a Key Partnership on POET’s Business

Despite the setback, POET said that it is continuing to focus on its core business of designing optical engines, light sources, and modules for artificial intelligence networks and hyperscale data centers. The company highlighted its patented POET Optical Interposer platform, which integrates photonic and electronic devices into a single chip using semiconductor manufacturing techniques, as per the Investing.com report.

Management also pointed to ongoing efforts with other customers, including a recently disclosed purchase order worth about $5 million from another technology firm. However, the company acknowledged that there is no guarantee it will be able to rebuild its relationship with Marvell, as per the Benzinga report.

RSI and Market Signals: Why Volatility May Continue

Investor sentiment is also being shaped by broader concerns. The stock’s relative strength index (RSI) sits at 81.43, indicating overbought conditions and raising the likelihood of volatility. The company is not expected to be profitable this year, with recent figures showing a loss of $0.68 per share.

POET Earnings Preview: Key Expectations for May 13

Looking ahead, attention is turning to the company’s next earnings report, expected around May 13. Estimates suggest a loss of 5 cents per share, alongside revenue of about $35 million, up from $17 million a year earlier, as per the Benzinga report.

FAQs

Why did POET stock fall sharply?
The drop followed Marvell canceling all purchase orders linked to Celestial AI.

What should investors watch next?
The upcoming earnings report expected around May 13.