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.