Another day, another round of huge volatility for Poet Technologies (POET +1.14%) stock — and this time it's seeing huge valuation gains. The company's share price was up 29.1% as of 11:55 a.m. ET on Tuesday. At the same point in the day's trading, the S&P 500 and the Nasdaq Composite were up 0.7% and 0.9%, respectively.
While the bullish backdrop for the broader market is likely helping Poet's valuation move higher, it doesn't explain the massive rally for the stock. Surprisingly, the company's share price appears to be making huge gains despite little in the way of fresh business-specific news.
Image source: Getty Images.
Poet stock has seen incredible levels of volatility connected to news surrounding its order outlook. While the fiber-optics tech specialist initially saw massive gains on news that the company had secured a contract with a company that was acquired by Marvell, its share price gave up the gains following news Marvell had canceled the order.
Now, the stock is bounding higher again — and there's no clear catalyst for today's explosive rally. The company has not submitted any new regulatory filings or published new press releases, and there does not appear to be any new bullish analyst coverage on the stock.
Notably, Poet stock actually saw a big rally in the lead up to CFO Thomas Mika's eventually ill-fated announcement of the deal with Marvell's Celestial AI. While that rally coincided with increased excitement surrounding photonics technologies and some other artificial intelligence (AI) plays, the gains had occurred on relatively little news.
On the heels of rebound rally momentum, some investors may be pouring into the stock with the expectation that the company is poised to make an order announcement in the not-too-distant future. But while meme stock momentum could help push Poet stock higher in the near term, investors should move forward with the understanding that shares look like a very risky bet amid the dynamics surrounding the canceled Marvell deal.
Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Marvell Technology. The Motley Fool has a disclosure policy.
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Poet Technologies has been taking investors on a wildly volatile ride.
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