By Lisa Thompson
NASDAQ: POET
READ THE FULL POET RESEARCH REPORT
With $430 million in cash and the ability to fund capex out of interest income, POET (NASDAQ: POET) is honing its strategy and is focusing solely on its current customers and other large prospects already in the pipeline. It is developing products that customers have already said that they want. The main strategy focus is (1) building high-speed Infinity engines at 800G and 1.6T using Mitsubishi lasers that require half the current number of lasers and (2) building Lightsource products, in the current generation using the Optical Interposer and in the next generation using its own hybrid lasers that are differentiated from the competition. Infinity engines use four lasers to produce eight channels of light at 200G per channel. The company is aggressively seeking both semiconductor and optical talent, which may include the potential acquisition of companies that have components or technology to support its strategy of providing differentiated products to the high-speed transceiver and light source markets.
It will ship its second-generation optical modules to Celestial AI (now Marvell) and its optical engines to Adtran and an unnamed non-Chinese Asian customer this year to generate most of its 2026 revenue. The unnamed customer will be taking product in the second half of 2026 and already has data center customers lined up, although it has not yet announced its own products and possibly never will to keep them secret.
Blazar is a Big Hit at OFC
The company had extreme interest in its new third-generation Blazar hybrid laser shown at OFC. This new design will be sampling later this year. Celestial has already expressed great interest in this next generation, as have many others. Its advantages are obvious as a substitute for conventional DFB lasers in both high-speed transceivers and light sources. Conventional DFB lasers consist of two main components: (i) a gain material (typically Indium Phosphide) that emits light when subjected to an electric current, and (ii) gratings that select the frequency of light emitted by the laser. The gain material is essentially the light bulb for the light which is produced at low cost and available from many suppliers. Gratings, on the other hand, are difficult to construct and represent about 70% of the cost of a conventional DFB laser.
POET’s Blazar separates these two by integrating the Indium Phosphide onto an Optical Interposer, which already has the gratings etched into the waveguide material. The optical interposer can tune the wavelength selection, allowing a single product to support multiple wavelengths separated by as small a distance or frequency as needed, rather than needing a different laser for each frequency. This allows more flexibility and very high precision, since the gratings are defined using lithography. It also reduces the cost to a fraction of the cost of a conventional DFB laser, and uses a two-thirds less Indium Phosphide, which is expensive and in short supply.
Management believes that once this product starts selling, it could push the company to a valuation much higher as investors see its potential. We believe the stock could be worth $8.40 per share based on 2028 revenues of $200 million at 4.3 times EV to Sales.
Celestial AI’s Merger with Marvell
On February 2, 2026, Marvell Technologies (NASDAQ: MRVL) bought pre-revenue Celestial AI for $3.25 billion. Celestial was founded by David Lazovosky, the former Chairman of POET, who served on the POET board from 2015 until 2020, when he founded Celestial AI. He was the CEO of Celestial AI and is now EVP & GM of the Data Center Networking Business Group at Marvell Technology.
Marvell expects “meaningful revenue contributions from Celestial AI to begin in the second half of fiscal 2028, reaching a $500 million annualized run rate in the fourth quarter of fiscal 2028, doubling to a $1 billion run rate by the fourth quarter of fiscal 2029.” It is not clear what POET’s portion of Celestial’s revenues could potentially be of that amount. Of course, POET would not ultimately be the sole source, and 2028/29 is still a long way off to understand pricing and actual revenues for either POET or Celestial.
According to Morgan Stanley, “Celestial's initial product is a chiplet that manages the signal chain directly from the CPU. Celestial AI already has a major design win with a top hyperscaler (implied to be AWS, given the expanded warrant agreement), and those chiplets will be integrated into both the hyperscaler’s custom XPUs and scale-up switches. Management made the point that there are material synergies, given Marvell's prior acquisition of Inphi, which gives them leadership in optical fabrics, that will likely be additive as they bring these products to market.”
News During Q4
On October 22nd, POET announced it received a production order valued at over $5 million for a shipment of POET Infinity optical engines. The purchase order for optical engines was made by a leading systems integrator that will manufacture and sell optical transceiver modules. POET is selling them 2xFR4 and 2xDR4 400G transmit engines and 800G 2xFR4 and DR8 receive engines.
On November 11th, POET and Quantum Computing Inc. (NASDAQ: QUBT) announced they would work together to develop 400G/Lane thin-film lithium niobate (TFLN) modulator-based 3.2Tbps engines targeted for completion in the second half of 2026. POET will fund the development. Quantum will provide expertise with TFLN to integrate the high-performance 400G/Lane modulators with the POET Optical Interposer™ platform. This engine will provide data-transfer speeds at 3.2Tbps and beyond. Quantum believes that to achieve a commercially viable optical modulator that operates at 400G/Lane requires an integration platform such as the POET Optical Interposer, and a 400G/Lane optical modulator that incorporates TFLN will be a radical step forward for the industry. TFLN has proven to be ideal for chip-scale photonic integration, and Quantum is one of the few companies that have demonstrated processes that can make TFLN adaptable for advanced wafer-level manufacturing.
After the Quarter Ended
On Jan. 20, 2026, POET announced it won the prestigious Product Innovation Award at the 12th Infostone Communication Consultant Shenzhen (ICCSZ) Awards, a competition that recognizes the finest applications in advanced optical communications and AI compute solutions. Dr. Mo Jinyu, POET SVP, Global Product Development, was also honored as the recipient of the Technology Innovation Award in the Individual/Team category. The Product Innovation Award recognized POET Teralight™ as a ground-breaking advance in 1.6T transmit and receive optical engines.
On February 12, 2026, POET announced it has earned an Elite Score of 4.5 and a category win in the Lightwave Innovation Reviews’ 13th annual awards.
POET demonstrated its two leading external light source (ELS) products at the annual Optical Fiber Communications (OFC) Conference at the Los Angeles Convention Center from March 16-19, 2026.
The products demonstrated were:
POET Blazar™: A ground-breaking ELS solution, Blazar is a highly integrated hybrid laser that exemplifies the company’s “semiconductorization of photonics” mission. It is designed to power both co-packaged optics (CPO) and high-bandwidth, chip-to-chip, light-based data communications links. This product is an alternative to traditional DFB laser-based solutions. The wafer-level chip-scale technology significantly lowers the cost of the light source, provides larger scale and better reliability, and increases the effective supply of Indium Phosphide. In particular, this product attracted substantial attention at the show as a cost-effective, high-performance solution for high-power, high-bandwidth, multichannel light sources for Co-Packaged Optics (CPO), as well as GPU-to-GPU and GPU-to-memory optical interconnects.
POET Starlight™: POET revealed its next-generation ELS solution, and the demo featured a compact engine solution with eight-channel high-power lasers at multiple wavelengths. Starlight was integrated into a working optical engine, showing the commercial applicability of the solution to the industry-standard ELSFP module.
At the conference, the company accepted the Elite Score award at the Lightwave Innovations Reviews reception. POET earned the recognition for Teralight™. In February, Lightwave Innovation Reviews announced its judges had given POET Teralight a score of 4.5, one of the highest received among winning entries.
On March 16, 2026, POET announced a collaboration with LITEON Technology to co-develop optical communication modules. LITEON is one of the world’s leading providers of optoelectronic semiconductor components and high-power optical systems. POET will begin development work this year and expects to have prototypes ready by late 2026. High-volume production is anticipated for 2027.
On March 17, 2026, POET and Lessengers announced the joint development of a 1.6T 2×DR4 optical transceiver module. Samples are targeted for availability in Q2 2026.
SUBSCRIBE TO ZACKS SMALL CAP RESEARCH to receive our articles and reports emailed directly to you each morning. Please visit our website for additional information on Zacks SCR.
DISCLOSURE: Zacks SCR has received compensation from the issuer directly, from an investment manager, or from an investor relations consulting firm, engaged by the issuer, for providing research coverage for a period of no less than one year. Research articles, as seen here, are part of the service Zacks SCR provides and Zacks SCR receives payments totaling a maximum fee of up to $50,000 annually for these services provided to or regarding the issuer. Full Disclaimer HERE.