Buzz on the Bullboards: Tech gains amid weak commodities

It was a shorter week with little movement for the TSX after the Victoria Day long weekend. Weak commodity prices and a significant sell-off among heavyweight financial shares counterbalanced gains, keeping Canada’s busiest stock market largely stagnant.

The annual inflation rate in Canada reached a three-year low, fuelling speculation of a possible interest rate cut next month. However, this sentiment was overshadowed by losses in the energy and materials sectors, which dragged down the TSX. The market focused on the latest Federal Reserve meeting minutes, which highlighted ongoing concerns over the slow progress in reducing inflation.

While this plays out in the background, investors have turned their attention to company earnings as quarterly reporting season continues. Here, we highlight three notable companies in three sectors making headlines on the TSX:

The technology market was one that saw some of the most activity this week. POET Technologies Inc. (TSXV:PTK, Forum) specializes in high-speed optical modules, optical engines and light source products for AI systems.

The design and development company caught a lot of attention when it reported its Q1 2024 unaudited condensed consolidated financial results. The team’s participation at the Optical Fibre Conference (OFC) in San Diego also marked a significant commercial milestone with the introduction of its first optical module for AI and cloud data centres – an 800G pluggable transceiver.

At OFC, POET also unveiled four new AI market-targeted products, including an 800G transmit optical engine chiplet and an eight-channel packaged light source for C-Band and O-Band wavelengths. These innovations support high-speed data communication for AI systems and co-packaged optics for data centres.

To bolster its entry into the high-speed optical transceiver market, POET announced a collaboration with MultiLane Inc., a leader in high-speed IO and data centre interconnect test solutions. Additionally, a major design win and collaboration with Foxconn Interconnect Technology (FIT) aims to develop and market 800G and 1.6T pluggable optical transceiver modules, addressing the growing demand for advanced AI applications and high-speed data networks.

To finance this growth, POET completed a series of non-brokered private placements since Jan. 1, raising approximately C$26.4 million. An additional C$10.8 million was raised through an “at the market” offering in the U.S. As of May 15, POET reported cash and cash equivalents of US$23.6 million and working capital of US$22.8 million, with 60,485,477 common shares issued and outstanding.

Fortune Minerals Ltd. (TSX:FT, Forum) recently received significant funding from the U.S. Department of Defense to advance its NICO project, which spans the Northwest Territories and Alberta. The company secured a US$6.38 million grant to enhance domestic cobalt production capacity, crucial for battery and high-strength alloy supply chains. Fortune Minerals also earned up to C$7.5 million from the Government of Canada to further advance the NICO project towards a construction decision.

The funding will enable Fortune to divide its focus four ways: optimizing hydrometallurgical processes at the Alberta refinery, securing necessary authorizations and permits for the mine and concentrator in the Northwest Territories, and completing an updated feasibility study. The NICO project could likely become a reliable supplier of cobalt sulphate for North America’s lithium-ion battery industry, with anticipated annual production of 1,800 metric tons of cobalt, 47,000 troy ounces of gold, 1,700 tons of bismuth, and 300 tons of copper.

PyroGenesis Canada Inc. (TSX:PYR, Forum), known for its advanced plasma processes and sustainable solutions aimed at reducing greenhouse gases and environmental pollutants, announced a significant legal settlement.

Its wholly owned subsidiary, Pyro Green-Gas Inc., along with others, settled all ongoing legal proceedings with Gas RNG Systems Inc. The no-fault settlement resulted in a C$1.5 million payment, concluding the legal disputes with full and final releases from everyone involved.

Despite a challenging week on the TSX, these three companies are some of the few standouts making significant strides. Stay informed about developments, as they offer insights into potential growth opportunities in various sectors. Keeping up of these companies’ progress and market activities can help investors make informed decisions in a dynamic and evolving market landscape.

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