Author: Curry, Deep Tide TechFlow

With just one sentence, the valuation of AI concept stocks can disappear by half in a day. Yesterday, during the trading session of the US stock market, a small company called POET Technologies set a wrong example.

This is a dual-listed optical communication chip company in the US and Canada, which specializes in optical engines for optical signal communication between data center GPUs. At the beginning of this year, its market value was less than $500 million, and for most of the past decade, it has been losing money.

According to the financial report released by POET on March 31, the company's revenue in the fourth quarter of 2025 was $341,000, with a net loss of $42.7 million. By the standards of AI concept stocks, this scale is roughly equivalent to that of an academic research project.

Yet yesterday, POET's stock price plummeted 47% in a single day, marking the largest single-day decline since the company's listing.

Even more bizarre, over the previous five trading days, POET's stock price surged from just over $7 to $15.50, a weekly increase of 108%, reaching a new high in 11 years.

Doubling in seven days and halving in two; those who don't know might think it's a meme coin.

This kind of volatility usually signifies one of two things. Either the market has completely changed its view on a certain fact, or the market was betting on a story that would not materialize. POET belongs to the latter category this time.

The story that drove the stock price up was a client relationship that POET had publicly disclosed.

Its client is Marvell, a US company that produces AI data center chips. On March 31 of this year, Nvidia invested $2 billion in Marvell, incorporating it into its own NVLink Fusion ecosystem.

Overnight, Marvell transformed from a company producing supportive chips for data centers into one of the most important partners in Nvidia's AI ecosystem.

POET is a bit further down the food chain than Marvell, supplying a subsidiary of Marvell that specializes in optical interconnections. The market sees this as POET being the farthest supplier in Nvidia's AI ecosystem.

A bit far from the table, but still at the edge of it.

What brought the stock price down was also the same relationship. On April 23, Marvell sent a letter to POET canceling all orders. The reason was simply that they were suspected of breaching confidentiality obligations.

As for how POET managed to lose this relationship, it began with a financial live stream a week prior.

The CFO far from the table said the wrong thing

How far is POET from Nvidia's table? Two companies separate them.

Nvidia invested in Marvell, integrating it into its AI ecosystem. Marvell acquired a startup specializing in optical interconnections called Celestial AI. POET has been a small supplier for Celestial AI for several years.

This is a chain similar to that of distant relatives. At the end of the chain, POET had a market capitalization of less than $500 million at the beginning of this year. It has no direct relationship with Nvidia.

But the market is willing to stretch the chain, viewing POET as touching the edge of Nvidia's AI ecosystem through Marvell. Just touching is enough.

On April 21, POET’s CFO Thomas Mika appeared on a financial interview with Stocktwits. Stocktwits is a financial community platform in the US, somewhat comparable to a mix of Xueqiu, Stock Bar, and financial live streaming rooms, mainly used by retail investors.

It has its own video interview program, specifically inviting executives from publicly listed companies to talk about their current situation, targeting retail investors discussing specific stocks on the platform.

When the host mentioned the collaboration with Marvell, Mika accidentally revealed a few details, such as confirming that Marvell had placed an order with him exceeding $5 million, to be delivered in the next quarter.

In the five trading days after the video went live, POET's stock price soared from the $7 range to a high of $15.50, a weekly increase of 108%, reaching an 11-year high. The popular discussion threads featured titles with the three words “Nvidia”.

But the price of speaking became evident two trading days later.

On April 23, Marvell sent POET a written notice canceling all orders. The reason was briefly stated: POET disclosed procurement orders and shipping information, violating confidentiality obligations. Every single word the CFO said during the live stream was directly included in the determination of breaching confidentiality agreements.

POET itself kept quiet about it until April 27, when it announced the incident to shareholders. On that day, POET's stock price fell 47% in a single day, the largest single-day decline since the company’s listing, almost erasing the previous week's 108% increase.

Consequently, retail investors in the investment community felt deceived.

The next day, several US law firms began posting online, calling for retail investors who lost money on this stock to join a collective lawsuit against POET’s executives.

Thus, a “distant relative version” of an Nvidia concept stock experienced a five-day dream.

The valuation of AI concept stocks is a rope spun from imagination

POET's total revenue last quarter was $341,000. In the same quarter, it reported a net loss of $42.7 million.

For a company of this size, based on fundamental valuations, its market value should not exceed the cash on hand. POET has $430 million in cash, primarily raised through continuous share issuances over the past two years. In other words, after removing the cash from financing, the actual business value of POET is negative.

But the market does not calculate it this way.

At the beginning of April, POET's market capitalization was less than $500 million, but on April 25, it surged to over $800 million during trading. The additional $300 million was because the market believed that the orders it received were backed by Nvidia.

A several million dollar indirect supply contract, multiplied by the five words “Nvidia AI ecosystem”, doubled the valuation.

Supporting this valuation is clearly a rope imagined by investors. POET supplies a startup acquired by Marvell, which is then invested in by Nvidia. Each segment stands on its own. However, there are two layers in between, and neither of those layers are under POET's control.

As long as one link in the chain malfunctions, the market's FOMO regarding small-cap AI concept stocks will immediately dissipate.

Domestic readers should be very familiar with this method of valuation.

The A-share market has a long-standing sector called "Apple Supply Chain Concept Stocks", comprising domestic companies that supply Apple. At its peak, their total market value exceeded one trillion. The logic of these companies’ valuations is identical to that of POET; if they stay on Apple’s supplier list, they get valued, and as soon as they drop off, their valuation plummets.

For example, GoerTek saw a 30% drop in two days in 2022 because it was cut off by Apple, and OFILM was removed from Apple’s supply chain in 2021, leading to an 80% decline in stock price over the next three years.

Nvidia is the Apple of the AI era.

Surrounding Nvidia, the global capital market has cultivated a whole circle of such "Nvidia concept stocks." Companies supporting Nvidia, companies supporting Nvidia's customers, companies supporting Nvidia's customers' customers...

The protagonist of this article, POET, stands at the farthest layer from Nvidia in this circle. The farther away, the thinner the rope.

Nvidia’s table is crowded with companies like POET. Their valuations all rely on the ropes they hold. This week, it was POET’s rope that broke; whose rope will break next week is something no one can predict.