Poet Technologies Surges 13.4% on AI Infrastructure Breakthrough – What’s Fueling the Volatility?

Summary
• POET rockets 13.38% intraday to $8.0952, breaking through 52W high of $9.41
• Options frenzy: 8,523 contracts traded on $8 call, 2,684 on $8 put
• Sector leader Cisco (CSCO) declines 1.85% as communication equipment sector grapples with security concerns

POET Technologies (POET) is experiencing a seismic intraday rally, surging 13.38% to $8.0952 as of 8:07 PM. The stock has traded between $6.88 and $8.135, with options activity surging to 9.2 million shares traded. This volatility coincides with a deep-dive analysis from long-term investors highlighting POET’s role in AI photonics infrastructure and a sector-wide reassessment of Chinese-made communication equipment risks.

AI Photonics Infrastructure Positioning Drives POET’s Volatile Rally
POET’s explosive move stems from a detailed investor analysis emphasizing its CMOS-compatible optical interposer platform, which enables wafer-scale integration and partnerships with Foxconn and Luxshare. These relationships position POET as a critical manufacturing layer for AI infrastructure, particularly in Co-Packaged Optics (CPO) and External Laser Source (ELS) architectures. The stock’s surge aligns with industry shifts toward scalable photonics solutions, as highlighted by its 800G/1.6T engine capabilities and NPI-to-volume production transition. This structural positioning, rather than short-term news, underpins the volatility.

Communication Equipment Sector Mixed as POET Defies Downward Trend
While the broader communication equipment sector faces headwinds—exemplified by Cisco’s 1.85% decline—POET’s rally reflects its unique role in AI infrastructure. Sector news about rogue communication devices in Chinese solar inverters has heightened security concerns, yet POET’s focus on U.S.-aligned manufacturing partnerships (via Foxconn/Luxshare) insulates it from these risks. This divergence underscores POET’s potential to benefit from infrastructure supply chain realignments.

Options and ETF Strategy for POET’s High-Volatility Environment
• 200-day average: $5.47 (well below current price)
• RSI: 42.39 (oversold territory)
• MACD: 0.33 (bullish divergence)
• Bollinger Bands: $5.77–$7.95 (current price near upper band)

POET’s technicals suggest a short-term bullish trend amid a 看跌吞没 reversal pattern, but the RSI’s oversold reading and MACD divergence hint at potential continuation. Key support/resistance levels at $5.25–$5.37 (200D) and $7.13–$7.19 (30D) demand attention. The stock’s 10.2% turnover rate and 8.53% intraday volatility (per Bollinger Bands) confirm high risk/reward dynamics.

Top Options Picks:
• POET20260123C8 (Call, $8 strike, Jan 23 expiry):
- IV: 101.37% (high volatility)
- Leverage: 13.14% (moderate)
- Delta: 0.578 (moderate sensitivity)
- Theta: -0.0438 (rapid time decay)
- Gamma: 0.286 (high sensitivity to price moves)
- Turnover: 337,840 (liquid)
- Payoff: At 5% upside ($8.49), payoff = $0.49 per contract. Ideal for aggressive bulls capitalizing on short-term momentum.

• POET20260123P8.5 (Put, $8.5 strike, Jan 23 expiry):
- IV: 120.95% (extreme volatility)
- Leverage: 9.58% (moderate)
- Delta: -0.543 (moderate bearish exposure)
- Theta: -0.0103 (slow decay)
- Gamma: 0.243 (high sensitivity)
- Turnover: 3,205 (liquid)
- Payoff: At 5% upside, payoff = $0.00 (strike above target). Best for hedging against a potential pullback.

Action: Aggressive bulls may consider POET20260123C8 into a break above $7.37 resistance. Cautious investors should monitor $6.63 support, with a stop-loss below $6.01.

Backtest Poet Technologies Stock Performance
The backtest of POET's performance following a 13% intraday increase from 2022 to the present shows mixed results. While the 3-Day, 10-Day, and 30-Day win rates are relatively high at 40.52%, 42.86%, and 54.10%, respectively, the overall returns over these periods are modest, with a maximum return of 13.74% over 30 days. This suggests that while POET has a strong short-term momentum, its long-term performance is more muted.

Act Now: POET’s AI Infrastructure Play Could Be a High-Reward Bet
POET’s rally hinges on its structural positioning in AI photonics infrastructure, with manufacturing validation and CPO/ELS adoption as key catalysts. The stock’s technicals suggest a continuation of the bullish trend if $7.37 resistance is cleared, but a breakdown below $6.63 support could trigger a retest of $5.25–$5.37 (200D). Sector leader Cisco’s 1.85% decline highlights broader communication equipment sector fragility, making POET’s U.S.-aligned supply chain a relative strength. Investors should prioritize POET20260123C8 for aggressive upside or POET20260123P8.5 for hedging, while watching $7.37 and $6.63 levels. Watch for $7.37 break or $6.63 breakdown to confirm direction.