FREMONT, Calif., Sept. 6, 2026, 1:00 p.m. EDT — Shares of AXT Inc. (NASDAQ:AXTI) jumped 9.7% on Friday to $61.64. The move lifted the compound-semiconductor supplier’s equity value to about $4.04 billion.
That valuation is the harder number. It equals 21.2 times annualized second-quarter sales, even after a record indium-phosphide quarter.
There is another wrinkle. Interest earned on AXT’s enlarged cash pile supplied 42.5% of quarterly net income attributable to the company. Investors are paying for manufacturing growth that the capital has yet to produce, not merely the profit already reported.
AXTI closed below its April financing price
. The U.S. market is closed for the weekend and Labor Day; Tuesday is the next regular session.
The shares remain 4.1% below the $64.25 price of AXT’s April offering. They have also fallen 30.8% since June 5, despite Friday’s bounce.
The operating recovery is real. Second-quarter revenue reached $47.6 million, up 165% from a year earlier. Gross margin climbed to 44.9% from 8.0%.
Chief Executive Morris Young said AXT recorded its “highest quarterly indium phosphide revenue to date.” Those wafers feed optical transceivers, silicon photonics and other high-speed links used in data centers.
A $4.04 billion value on a $47.6 million quarter
The annualized figures are scenarios, not forecasts. Share count comes from AXT’s latest Form 10-Q.
A long-term supply agreement gives that growth case tangible support. Lumentum Holdings Inc. (NASDAQ:LITE) agreed in July to buy compound-semiconductor substrates through 2031.
Lumentum’s first $43.5 million deposit is due within 30 business days. A second deposit of the same size is planned for 2028.
Yet those deposits become credits against later shipments. They are financing and customer commitment, not immediate product revenue.
Cash interest did a large share of the work
Interest equaled 42.5% of attributable net income. Bars use net income as the 100% reference, so components do not form a waterfall.
The interest contribution followed two large equity raises. AXT sold 9.84 million shares in April and received about $600.1 million net. It had already raised $93.9 million in December.
Cash reached $412.2 million at June 30. Restricted cash added $33.1 million, while short-term investments totaled $5.0 million. The balance sheet also carried $79.0 million of short-term loans.
The April raise changed AXT before factories did
The central question is deployment: how quickly fresh capital becomes durable wafer capacity and operating earnings.
Execution still runs through China. AXT’s filing says all three product families made by Tongmei require Chinese export permits. A backlog remained for orders lacking approvals.
Management called indium-phosphide permits its most significant challenge. It cannot predict when every permit will arrive. That makes order conversion as important as demand.
Risks: AI-network spending could cool, export permits could delay shipments, and new capacity may earn poor returns. AXT also has to turn customer deposits into profitable deliveries without sacrificing margins.
Tuesday’s test is therefore not whether traders liked Friday’s rally. It is whether buyers will pay above the financing price before operating profit catches the valuation.
