This Artificial Intelligence (AI) Semiconductor Company Has a $146 Billion Opportunity That No One Is Talking About. Here's Why the Stock Still Isn't a Buy.

The explosive growth in artificial intelligence (AI) data workloads is straining the physical limits of data centers. As generative AI models expand in size, training clusters demand ever-higher bandwidths. As a result, these systems are testing the physical thresholds for traditional copper interconnects on speed, power consumption, and heat.

Optical interconnects, which use pulses of light instead of electrons to transmit data, promise to enable faster, cooler, and more efficient communication between chips and servers.

Industry research suggests the optical AI accelerator market could grow from about $2 billion this year to $146 billion by 2040, driven by rising demand from hyperscalers for energy-efficient photonics in high-performance computing.

In this landscape, Poet Technologies (NASDAQ: POET) has emerged as a potential disruptor thanks to its proprietary Optical Interposer platform. Yet despite the massive opportunity, a closer look at the company's fundamentals reveals why it is not a compelling buy right now.

Poet's edge in optical AI infrastructure

Poet's Optical Interposer is a silicon-based platform that integrates photonic components directly with electronic circuits. This wafer-level architecture eliminates costly and error-prone alignment steps seen in conventional optical modules.

By bringing optics closer to compute links, Poet hopes to meaningfully reduce both latency and power consumption while simultaneously scaling bandwidth to meet big tech's growing appetite for GPU clusters. The company is co-developing its optical modules with Taiwan-based Lite-On Technology, with prototypes scheduled for late 2026 and high-volume production targeted for 2027.

Most recently, Lumilens signed $50 million purchase order for Poet's Electrical-Optical Interposer engines aimed at frontier AI infrastructure, under a joint development agreement. The deal is structured to support cumulative purchases that could exceed $500 million over five years.

Is Poet really an innovator in the AI photonics market?

For all its technical aspirations, Poet has thus far generated little buzz within broader AI conversations, which are dominated by chip designers, hyperscalers, and enterprise software developers. In my opinion, that lack of chatter is due to the fact that Poet is still at a fairly early stage of its development: The company is still transitioning from capital-intensive research and development to meaningful commercial sales. The spotlight in photonics, which is itself limited at the moment, is reserved for larger incumbents.