New York, June 15, 2026, 06:18 EDT
- AXTI soared 10.01% to end at $97.18 on Friday. Premarket action Monday showed shares trading near $110.41.
- Indium phosphide demand for optical chips in AI data centers is pushing the shift.
- The rally has pushed the stock toward risky territory, with valuation now at or above most analyst targets. It’s no longer looking cheap.
AXT, Inc. (AXTI) climbed again in early trading Monday, adding to Friday’s strong rally as investors looked at indium phosphide supply. AXTI closed at $97.18 Friday, up 10.01%. Shares traded between $87.22 and $103.50 with more than 10 million shares changing hands. In premarket trading, StockAnalysis pegged the price at $110.41 at 6:13 a.m. EDT, before the main session and when trading is less liquid.
AXT shares are climbing with traders watching the company as a niche player in the AI data-center supply chain. TipRanks said Friday AXTI stock was gaining after reports of delays in Chinese indium phosphide export approvals, which have sparked talk of a possible shortage. Indium phosphide, or InP, is a compound semiconductor for optical chips that send data via light instead of electricity. Reuters said InP is seen as speeding up AI data centers and making them more efficient. SemiAnalysis analyst Konrad Wang told the news service, “InP is one of several supply chain bottlenecks collectively gating AI data centre buildouts.” TipRanks Reuters
That’s why the stock can move on news about supply. When customers want more InP substrates and supply stays tight, traders bet on higher prices, stronger revenue, maybe even better margins. Reuters said AXT is the world’s No. 2 producer of InP substrates. AXT and Sumitomo have close to 80% of the global market. Since China imposed export curbs, prices for a 6-inch InP wafer have soared 250% to $5,000. AXT’s latest numbers support the “improving operating leverage” story—Q1 revenue rose to $26.9 million from $19.4 million a year ago, GAAP gross margin was 29.6%, and GAAP net loss narrowed to $1.6 million, or $0.03 per share. CEO Morris Young in April said “AXT is stepping up.” Reuters Business Wire
AXT’s downside is still on the table. The company turned in a loss, not a profit. Reuters pointed out the majority of its InP substrate manufacturing is in China, where permit delays are causing a backlog. Dilution hangs over the stock—extra share sales hit current holders’ stakes. In April, AXT priced a public offering at $64.25 a share for 8.56 million shares. With underwriters taking the full option, that bumps proceeds to $632.5 million. Later, underwriters also took another 1.28 million shares. Shareholders approved raising total authorized common stock to 120 million, up from 70 million, which lets AXT sell more shares more easily. Business Wire Business Wire
AXTI isn’t jumping out as a clear buy. Bulls point to the company’s tough-to-replicate AI bottleneck assets, recent fundraising, and possible margin upside if demand keeps up. But bears push back, saying most of that is already in the stock. Investing.com shows a Buy consensus on AXTI, but the 12-month target average is $96.50, with analyst targets spanning from $73 up to $125. That average target is below where AXTI traded in the premarket. Investors are now waiting for management’s next comments on InP capacity, export permits, and customer appetite. AXT will present at the Northland Securities Virtual Growth Conference on June 23, with earnings set for July 30. Investing.com Business Wire
