Markets
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Luke Kawa

POET Technologies soars as Marvell’s acquisition of Celestial AI validates its potential role in the AI boom


POET Technologies is ramping in premarket trading as investors believe that Marvell Technology’s acquisition of Celestial AI validates its technology and bolsters its sales outlook.

Along with its Q3 results released after the close on Tuesday, Marvell announced that it was acquiring Celestial AI for at least $3.25 billion in cash and stock, an amount that could go up by an additional $2.25 billion if Celestial hits certain revenue targets within roughly two years.

During Marvell’s earnings call, CEO Matt Murphy raved about Celestial AI’s ability to play a crucial supporting role in the AI boom:

“Copper-based interconnects used in today’s scale-up systems are approaching their fundamental limits in reach and bandwidth, creating compelling need for optical solutions. Celestial AI’s photonic fabric technology platform was purpose-built for this inflection. It enables large AI clusters that scale both within and across racks using a high-bandwidth, low-latency, low-power and cost-effective optical fabric. This breakthrough enables a true optical solution with greater than two times the power efficiency of copper interconnects, but with far longer reach and significantly higher bandwidth.”

What’s good for Celestial is presumably good for POET.

POET and Celestial are, loosely speaking, in different parts of the same business: speeding the transmission of data using photonics. POET is more upstream, offering the technology that enables these solutions, while Celestial applies this technology to its system for use in data centers.

Celestial was listed as a “customer” of POET in previous annual reports. Back in 2022, the two firms announced that POET’s key technology, its optical interposer, would be supplied to Celestial.

“The customized Optical Interposer platform that we have co-developed with POET is among the most advanced of its kind in high-speed computing,” David Lazovsky, founder and CEO of Celestial AI, said at the time.

Retail trader interest in POET has certainly been re-piqued. As of 7:49 a.m. ET, the ticker is among the most mentioned on the r/WallStreetBets subreddit over the past 12 hours, per SwaggyStocks.

SwaggyStocks POET
Source: SwaggyStocks

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Lululemon’s stretch getting tested: Stock plunges after after outlook is cut

Lululemon shares are down double digits in premarket trading after the company cut its full-year sales and profit outlook, overshadowing a Q1 beat and raising fresh concerns about the brand’s turnaround efforts.

The company now expects fiscal 2026 revenue to be flat to down 1%, compared with its prior forecast for 2% to 4% growth. Guidance for full-year diluted earnings per share was dragged down to a range of $10.95 to $11.15, below the company’s previous guidance of $12.10 to $12.30 and well below Wall Street’s estimate of $13.26.

Key numbers for Q1:

  • EPS of $1.69 vs. the $1.68 expected.

  • Revenue of $2.47 billion vs. the $2.43 billion expected.

The modest top-line beat masked a widening divergence between Lululemon’s geographic markets. While international revenue rose 22% overall with a 30% increase in Mainland China, the bigger problem remains North America, where revenue fell 5%.

Interim co-CEO and CFO Meghan Frank acknowledged during the earnings call that recent product rollouts underperformed. A highly anticipated yoga campaign failed to generate its expected “halo effect” across broader product lines.

Profitability metrics took a major hit, with gross margins contracting by 410 basis points to 54.2% due to mounting tariff costs and promotional markdowns. Operating income consequently fell 37% year over year to $276.9 million.

“We experienced spikes of negative commentary in the media and on social channels with regard to our brand, which had an impact on traffic and overall top-line performance,” Frank said during the earnings call. “And second, not all of our product launches have met our expectations. While we have had several successful launches so far this year, we have seen others as we start Q2 not generate the anticipated guest response.”

Lululemon’s valuation has already been steadily compressing for years. While it was once one of retail’s richly valued stocks, investors have been questioning whether the company can return to the double-digit growth era.

The results also arrive during a leadership transition. Lululemon announced back in April that former Nike executive Heidi O’Neill is set to take over as CEO in September, with investors looking to her to revive growth in North America and restore the brand’s growth.

As Lululemon faces both macroeconomic pressure and brand-specific challenges, its stock has dropped around 40% year to date.

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The US economy added 172,000 jobs in the month of May, the Bureau of Labor Statistics reported Friday, sending 10-year Treasury yields higher.

The strong May job market surprised economists. Experts had predicted only 85,000 new jobs — just half the reported number. The unemployment rate held steady at 4.3%, as expected.

The job growth story is a hopeful spot for the economy as consumers continue to feel inflationary pressure from the Iran war.

Job gains were buoyed by the leisure and hospitality sector, which added 70,000 jobs, as well as local government, healthcare, and education.

Both the March and April jobs reports were revised upward, making them collectively 93,000 higher than previously reported.

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