Shares of optical networking technology company, POET Technologies Inc (CVE: PTK) (NASDAQ: POET) surged over 40 per cent on the news of a collaboration with Mitsubishi Electric Corporation (OTCMKTS: MIELF).
Announced on Friday, the deal is to co-develop integrated optical engine chipsets for 3.2T pluggable transceivers. These are intended to help boost the rapidly growing artificial intelligence and data center markets. The partnership validates POET’s technology and introduces new revenue streams and market opportunities.
POET’s development of the POET Optical Interposer and Photonic Integrated Circuits (PICs) are crucial for data centers, AI, and telecommunications. These sectors are experiencing rapid growth. POET’s announcement that samples of their POET Infinity Chiplet are now available adds to investor confidence by demonstrating their readiness to meet market demands.
“The AI and datacom networks need a pluggable transceiver solution for 3.2T and POET’s optical interposer is one of the few technologies that can achieve that performance,” said Suresh Venkatesan, POET chairman and CEO.
Venkatesan also said the news further validates that everything the team has worked so hard to achieve over the past five years. He emphasized that the industry is steadily adopting POET’s products. He also expressed confidence that demand will accelerate as customers recognize the power efficiency and cost savings the company offers to them and their clients.
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Market expected to grow to USD$56B by 2030
Most of the attention has been coming from various YouTube channels and financial commentators. This visibility likely sparked increased investor interest.
Although today’s spike did not directly highlight it, POET’s financial health, supported by a well-managed balance sheet and growing cash reserves, increases its appeal. Investors view financial stability as a strong sign of a company’s ability to navigate market volatility successfully.
The stock has also gained significant traction on platforms like X (formerly Twitter). This suggests that speculative trading has contributed to the price increase. Heightened interest often leads to more buying.
The optical networking technologies market is substantial and continues to grow rapidly.
According to market analysts at Fortune Business Insights, the global optical communication systems and networking market size was valued at USD $31.63 billion in 2023. It’s also expected to grow to USD $56.22 billion by 2030, at a compound annual growth rate of 8.6 per cent. In 2022, Asia Pacific dominated the market with a market share of 53.44 per cent.
Several factors fuel the growth of the optical networking market. Data centers increasingly rely on optical networking solutions to improve bandwidth and reduce latency.
Optical networks play a role in meeting the technical requirements for mobile networks with the global rollout of 5G. Additionally, artificial intelligence and machine learning applications require rapid data processing and immense bandwidth, which optical technologies can support.
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