olivLaw · US equity research
AXT, Inc. AXTI
Semiconductors & Related Devices · SIC 3674 · Vertical: Semiconductors & Related Devices (SIC 3674)
AXT is a materials science company that produces wafer substrates made from indium phosphide, gallium arsenide and germanium, used where silicon cannot meet performance requirements. In 2026 the company reports a sharp rise in revenue, driven by demand for optical connectivity in data centers, while China's export permit requirements remain a major uncertainty. Revenue in the second quarter of 2026 reached 47.6 million USD.
The AI analysis may be outdated: new filings came after its sources (see the «AI analysis» section).
At the close of 05 Nov 2026, AXT, Inc. (AXTI) stock was 36.72 USD (−22.76% on the day), with market capitalisation 2.4 bn USD, P/E 1,792.4 on diluted EPS of 0.02 USD over the last 12 months, beta 2.62, 52-week range 8.87–140.83 USD. Latest reported quarter (Q2 2026): revenue of 47.6 m USD (+164.8% YoY), net income of 11.1 m USD, diluted EPS 0.17 USD.
Data as of · AI analysis dated · Source: SEC filings and closing prices, computed by olivLaw.
Price history
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Technical reading
- RSI (14)
- 31.8
- weak (30–45)
- Bollinger (20, 2)
- 41.97 – 70.17
- below the lower band · %B -0.19 · band width 50.3%
- SMA 50 / 200
- 64.56 / 65.34
- downtrend (price < SMA50 < SMA200)
- MACD (12, 26, 9)
- -5.92 / -4.39
- MACD below signal
Indicators describe past prices; on their own they do not predict direction. On our history the RSI ≤ 40 filter added no return (see the signals methodology).
Performance
| Company | S&P 500 | vs S&P 500 | Vertical median | |
|---|---|---|---|---|
| 1 month | −56.3% | −5.9% | −50.4 pp | — |
| 3 months | −51.2% | −4.6% | −46.5 pp | — |
| 6 months | −66.1% | +0.2% | −66.4 pp | — |
| Year to date | +124.6% | +7.4% | +117.2 pp | — |
| 1 year | +303.5% | +8.2% | +295.3 pp | +9.9% |
| 3 years | +1,496.5% | +68.4% | +1,428.1 pp | +59.8% |
| 5 years | +298.3% | +56.5% | +241.7 pp | — |
Price returns, dividends excluded.
Quarterly results
Latest quarter: Q2 2026 · 30 Jun 2026
Quarterly margins
Quarterly statements · USD
| Fiscal year | Q3 '24 | Q4 '24 | Q1 '25 | Q2 '25 | Q3 '25 | Q4 '25 | Q1 '26 | Q2 '26 |
|---|---|---|---|---|---|---|---|---|
| Revenue | 23.6 m | 25.1 m | 19.4 m | 18.0 m | 28.0 m | 23.0 m | 26.9 m | 47.6 m |
| Cost of revenue | 18.0 m | 20.7 m | 20.6 m | 16.5 m | 21.7 m | 18.2 m | 18.9 m | 26.2 m |
| Gross profit | 5.7 m | 4.4 m | -1.2 m | 1.4 m | 6.2 m | 4.8 m | 8.0 m | 21.4 m |
| Research & development | 3.4 m | 4.1 m | 3.1 m | 2.5 m | 1.0 m | 2.4 m | 3.0 m | 3.7 m |
| SG&A | 5.7 m | 6.4 m | 5.9 m | 5.7 m | 6.3 m | 6.3 m | 6.6 m | 7.3 m |
| Operating income | -3.4 m | -6.2 m | -10.3 m | -6.7 m | -1.1 m | -3.8 m | -1.6 m | 10.4 m |
| Depreciation & amortisation | 2.3 m ≈ | 2.2 m | 2.2 m | 2.3 m ≈ | 2.3 m ≈ | 2.3 m | 2.4 m | 2.5 m ≈ |
| Interest expense | 391.0 k | 318.0 k | — | 202.0 k | 395.0 k | 391.0 k | — | — |
| Pre-tax income | -2.3 m | -5.5 m | -9.9 m | -7.1 m | -1.2 m | -3.3 m | -1.1 m | 15.1 m |
| Income tax | 626.0 k | 113.0 k | 74.0 k | 579.0 k | 504.0 k | 501.0 k | 430.0 k | 2.1 m |
| Net income | -2.9 m | -5.1 m | -8.8 m | -7.0 m | -1.9 m | -3.5 m | -1.6 m | 11.1 m |
| Diluted EPS | -0.07 | -0.12 ≈ | -0.20 | -0.16 | -0.04 | -0.08 ≈ | -0.03 | 0.17 |
| Operating cash flow | -5.4 m ≈ | 1.3 m | -3.3 m | -4.6 m ≈ | -9.2 m ≈ | 4.3 m | -11.7 m | 10.8 m ≈ |
| Capex | 941.0 k ≈ | 167.0 k | 510.0 k | 279.0 k ≈ | 2.2 m ≈ | 3.0 m | 1.4 m | 7.2 m ≈ |
≈ derived quarter (cumulative difference / share-days average)
E/P over time
E/P = trailing-12-month diluted EPS / price at quarter end. E/P is the inverse of P/E and stays defined when earnings are negative.
Today's P/E sits at the 95 percentile of its own 22-quarter history (min 12.2, median 28.0, max 3,518.4; quarters with earnings only).
Fiscal years
| Fiscal year | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|---|---|
| Revenue | 102.4 m | 83.3 m | 95.4 m | 137.4 m | 141.1 m | 75.8 m | 99.4 m | 88.3 m |
| Revenue YoY | +3.8% | −18.7% | +14.5% | +44.1% | +2.7% | −46.3% | +31.1% | −11.1% |
| Net income | 9.7 m | -2.6 m | 3.2 m | 14.6 m | 15.8 m | -17.9 m | -11.6 m | -21.3 m |
| Net income YoY | −4.9% | −126.9% | unavailable | +350.1% | +8.5% | −213.1% | unavailable | unavailable |
| Diluted EPS | 0.24 | -0.07 | 0.07 | 0.34 | 0.37 | -0.42 | -0.27 | -0.49 |
| Diluted EPS YoY | −7.7% | −129.2% | unavailable | +385.7% | +8.8% | −213.5% | unavailable | unavailable |
| net % | 9.4% | -3.1% | 3.4% | 10.6% | 11.2% | -23.6% | -11.7% | -24.1% |
| Free cash flow | -37.3 m | -9.1 m | -14.0 m | -33.0 m | -37.2 m | -7.1 m | -17.9 m | -18.8 m |
Reported results vs expectations
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Balance sheet & financial health
Fiscal year 2025 · 31 Dec 2025
- Cash
- 120.3 m USD
- Financial debt
- 62.8 m USD
- Net debt
- -57.5 m USD
- Equity
- 296.6 m USD
- Total assets
- 433.8 m USD
- Debt / equity
- 0.21x
- Current ratio
- 2.72x
- ROE
- -8.3%
- ROA
- -5.5%
- FCF margin
- -21.3%
Financial statements (source on every figure)
Revenue and net income (USD)
Margins
Income statement · USD
| Line | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | Source (latest year) |
|---|---|---|---|---|---|---|---|
| Revenue | 95.4 m | 137.4 m | 141.1 m | 75.8 m | 99.4 m | 88.3 m | SEC (XBRL)· 17 Mar 2026verified |
| Cost of revenue | 65.1 m | 90.0 m | 89.0 m | 62.5 m | 75.5 m | 77.1 m | SEC (XBRL)· 17 Mar 2026verified |
| Gross profit | 30.3 m | 47.4 m | 52.1 m | 13.3 m | 23.8 m | 11.2 m | SEC (XBRL)· 17 Mar 2026verified |
| Research & development | 7.1 m | 10.3 m | 13.9 m | 12.1 m | 14.5 m | 9.0 m | SEC (XBRL)· 17 Mar 2026verified |
| SG&A | 19.2 m | 24.2 m | 25.7 m | 22.8 m | 24.1 m | 24.2 m | SEC (XBRL)· 17 Mar 2026verified |
| Operating income | 3.9 m | 12.9 m | 12.6 m | -21.6 m | -14.8 m | -22.0 m | SEC (XBRL)· 17 Mar 2026verified |
| Depreciation & amortisation | 4.3 m | 7.1 m | 8.1 m | 8.7 m | 9.0 m | 9.1 m | SEC (XBRL)· 17 Mar 2026verified |
| EBITDA | 8.3 m ≈ | 20.0 m ≈ | 20.7 m ≈ | -12.8 m ≈ | -5.8 m ≈ | -12.9 m ≈ | SEC (XBRL)· 17 Mar 2026derived |
| Interest expense | — | — | — | 1.5 m | 1.3 m | 1.3 m | SEC (XBRL)· 17 Mar 2026verified |
| Pre-tax income | 7.1 m | 17.6 m | 20.9 m | -19.0 m | -10.7 m | -21.5 m | SEC (XBRL)· 17 Mar 2026verified |
| Income tax | 2.0 m | 1.1 m | 2.2 m | 160.0 k | 1.1 m | 1.7 m | SEC (XBRL)· 17 Mar 2026verified |
| Net income | 3.2 m | 14.6 m | 15.8 m | -17.9 m | -11.6 m | -21.3 m | SEC (XBRL)· 17 Mar 2026verified |
| Diluted EPS | 0.07 | 0.34 | 0.37 | -0.42 | -0.27 | -0.49 | SEC (XBRL)· 17 Mar 2026verified |
| Weighted average diluted shares | 41.0 m | 42.7 m | 42.7 m | 42.6 m | 43.2 m | 43.9 m | SEC (XBRL)· 17 Mar 2026verified |
≈ computed by olivLaw from the reported lines of the same year: Operating income + Depreciation & amortisation.
Balance sheet · USD
| Line | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | Source (latest year) |
|---|---|---|---|---|---|---|---|
| Cash | 72.6 m | 36.8 m | 34.9 m | 37.8 m | 22.8 m | 120.3 m | SEC (XBRL)· 17 Mar 2026verified |
| Receivables | 24.6 m | 34.8 m | 29.3 m | 19.3 m | 25.6 m | 26.8 m | SEC (XBRL)· 17 Mar 2026verified |
| Inventories | 51.5 m | 65.9 m | 89.6 m | 86.5 m | 85.1 m | 81.7 m | SEC (XBRL)· 17 Mar 2026verified |
| Current assets | 164.5 m | 160.2 m | 183.5 m | 170.7 m | 158.3 m | 246.6 m | SEC (XBRL)· 17 Mar 2026verified |
| Property, plant & equipment, net | 115.8 m | 142.4 m | 161.0 m | 166.3 m | 159.7 m | 161.9 m | SEC (XBRL)· 17 Mar 2026verified |
| Total assets | 298.9 m | 332.4 m | 370.1 m | 358.7 m | 339.3 m | 433.8 m | SEC (XBRL)· 17 Mar 2026verified |
| Accounts payable | 12.7 m | 16.6 m | 10.1 m | 9.6 m | 12.4 m | 12.9 m | SEC (XBRL)· 17 Mar 2026verified |
| Short-term debt | — | 12.2 m | 47.1 m | 52.9 m | 47.3 m | 62.8 m | SEC (XBRL)· 17 Mar 2026verified |
| Current liabilities | 39.1 m | 47.8 m | 75.3 m | 81.6 m | 74.2 m | 90.5 m | SEC (XBRL)· 17 Mar 2026verified |
| Total liabilities | 43.3 m | 52.2 m | 80.3 m | 89.6 m | 84.4 m | 99.1 m | SEC (XBRL)· 17 Mar 2026verified |
| Equity | 208.0 m | 229.8 m | 244.9 m | 227.5 m | 216.3 m | 296.6 m | SEC (XBRL)· 17 Mar 2026verified |
Cash flow · USD
| Line | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | Source (latest year) |
|---|---|---|---|---|---|---|---|
| Operating cash flow | 5.9 m | -3.3 m | -8.8 m | 3.4 m | -12.1 m | -12.8 m | SEC (XBRL)· 17 Mar 2026verified |
| Capex | 19.9 m | 29.6 m | 28.5 m | 10.5 m | 5.8 m | 6.0 m | SEC (XBRL)· 17 Mar 2026verified |
| Free cash flow | -14.0 m ≈ | -33.0 m ≈ | -37.2 m ≈ | -7.1 m ≈ | -17.9 m ≈ | -18.8 m ≈ | SEC (XBRL)· 17 Mar 2026derived |
| Investing cash flow | -16.4 m | -38.8 m | -25.2 m | -2.6 m | -4.4 m | -6.8 m | SEC (XBRL)· 17 Mar 2026verified |
| Financing cash flow | 52.7 m | 5.7 m | 38.0 m | 8.6 m | -536.0 k | 107.1 m | SEC (XBRL)· 17 Mar 2026verified |
≈ computed by olivLaw from the reported lines of the same year: Operating cash flow − Capex.
Computed indicators
Growth
Profitability
Returns
Balance sheet
Liquidity
Cash
Efficiency
Market and valuation
4 indicators that do not apply to the sector.
Valuation
olivLaw classification
Score: 19 / 100
A scoring methodology on indicators and valuation, not investment advice.
score < 40
Closing price
05 Nov 2026Source: olivLaw, closing series
Market cap: 2.4 bn USD
Key indicators
Coverage and freshness
Score by group
- Quality11
- Growth3
- Balance sheet100
- Valuation6
Estimated value range
The combined range = the median of the valid methods' low, central and high values; it is not a probability interval and does not cover every result. Envelope of all methods: 6.94 – 29.20 USD.
Valuation assumptions are editorial choices, not measured; beta is not measured.
Method ranges (USD per share)
— — Mid · ▏ Price
Valuation methods
- DCF (discounted cash flow)unavailable · the base of the ratio is not positive
- Peers: EV/Sales7.90 – 29.20 (Mid 13.87)26 companies used · median multiple 4.6x · quartiles 1.5x – 12.6xAAOI, ADI, AMAT, AMD, AMKR, ARRY, AVGO, FSLR, INTC, LEDS, LSCC, MCHP, MRVL, MTSI, MU, NVDA, NXPI, ON, OSIS, PENG, Q, SPCB, SUNE, TE, TXN, TYGO
- Peers: EV/EBITDA6.94 – 8.87 (Mid 7.97)11 companies used · median multiple 14.5x · quartiles 9.5x – 18.9xAMAT, AMKR, FSLR, MCHP, MU, NVDA, NXPI, ON, OSIS, PENG, SPCB
Classification (SIC) comparables group by industry code, not by economic activity; the direct group is an editorial selection by activity. Members' multiples are on their own trailing twelve months, at their own latest close.
Assumptions (illustrative, editorial)
- Risk-free rate
- 4.3%
- Equity risk premium
- 5.0%
- Beta (default)
- 1.00
- Cost of equity
- 9.3%
- Terminal growth
- 2.5%
Factor scorecard
Unattractive profile · Score 19/100
| Factor | Value | Score | Weight used |
|---|---|---|---|
| Gross margin · Quality | 32.2% | 0 (on a fixed band) | 11% |
| EBIT margin · Quality | 3.1% | 35 (vs peers) | 9% |
| FCF margin · Quality | -15.6% | 0 (on a fixed band) | 9% |
| Revenue CAGR 3Y · Growth | -14.5% | 0 (on a fixed band) | 18% |
| Revenue growth (YoY) · Growth | -11.1% | 8 (vs peers) | 9% |
| Net debt / EBITDA · Balance sheet | -24.4x | 100 (vs peers) | 7% |
| Current ratio · Balance sheet | 4.8x | 100 (on a fixed band) | 7% |
| EV/Sales · Valuation | 16.6x | 11 (vs peers) | 18% |
| FCF yield · Valuation | -0.8% | 0 (on a fixed band) | 13% |
| Shareholder yield (distributions) · Returns | unavailable | unavailable | — |
Factors without a value were dropped; the remaining weights were renormalised.
Score groups
- Balance sheet100/100 · 2/2 factors with a value
- Growth3/100 · 2/2 factors with a value
- Quality11/100 · 3/3 factors with a value
- Returns· partialunavailable · 0/1 factors with a value
- Valuation6/100 · 2/2 factors with a value
A «partial» group is computed from under half of its weight or from one factor: it is not a full assessment of the group.
Memo
AXT INC (AXTI). Latest full fiscal year: 2025; data up to 2026-06-30.
Figures computed from the financial statements: revenue 88.3 m USD in 2025; YoY growth -11.1%; net margin 3.2%; ROE 0.8%; net debt/EBITDA -24.4x.
The estimated value range is 7.42–19.03 USD per share (median of 2 methods, agreement: low); assumptions are illustrative. Against the central value of 10.92 USD, the price of 36.72 USD leaves a potential of -70.3% (value / price − 1) and a margin of safety of -236.3% (1 − price / value). The range is the median of the methods' low, central and high values, not a probability interval.
olivLaw score 19/100, methodological classification: unattractive profile (score, margin of safety and method agreement together; not a judgement of the right price). Groups assessed only in part: returns. Not investment advice.
Text generated deterministically from the figures shown; no language model. Not investment advice.
What supports the thesis
- Net debt / EBITDA: -24.4x
- Current ratio: 4.8x
What contradicts it
- Gross margin: 32.2%
- FCF margin: -15.6%
- Revenue CAGR 3Y: -14.5%
- Revenue growth (YoY): -11.1%
- EV/Sales: 16.6x
- FCF yield: -0.8%
- The price is above the estimated value range
- The valuation methods diverge
Not assessed (insufficient data or a ratio without meaning): Shareholder yield (distributions).
Versus the vertical median
Semiconductors & Related Devices (SIC 3674) · same industry (4-digit SIC) · compared with 39 companies
Multiples and returns vs the median
Price rebased to 100 (monthly, 5 years)
Companies in the vertical
| Market cap | P/E | ROE | Net margin | Revenue YoY | 1A / 3A | |
|---|---|---|---|---|---|---|
| NVDANvidia Corp | 4,376.6 bn | 23.0 | 117.2% | 63.7% | +65.5% | +3% / +288% |
| AVGOBroadcom Inc. | 1,391.7 bn | 37.2 | 44.2% | 42.9% | +23.9% | −28% / +215% |
| MUMicron Technology, Inc. | 742.7 bn | 8.8 | 88.3% | 63.8% | +256.3% | +178% / +762% |
| AMDAdvanced Micro Devices, Inc | 663.3 bn | 88.0 | 11.8% | 16.8% | +34.3% | +86% / +234% |
| INTCIntel Corporation | 277.7 bn | — | -10.9% | -20.1% | −0.5% | +29% / +17% |
| TXNTexas Instruments Inc | 254.2 bn | 36.0 | 39.7% | 34.3% | +13.0% | +65% / +82% |
| AMATApplied Materials Inc | 253.4 bn | 27.5 | 41.1% | 30.1% | +4.4% | +27% / +113% |
| ADIAnalog Devices Inc | 174.9 bn | 42.8 | 12.2% | 29.8% | +16.9% | +36% / +97% |
| MRVLMarvell Technology, Inc | 117.1 bn | 44.1 | 16.5% | 27.9% | +42.1% | +49% / +140% |
| NXPINXP Semiconductors N.V. | 61.6 bn | 19.2 | 29.2% | 23.4% | −2.7% | +25% / +20% |
| MPWRMonolithic Power Systems, Inc. | 55.2 bn | 62.4 | 25.1% | 23.9% | +26.4% | +22% / +106% |
| MCHPMicrochip Technology Inc | 35.3 bn | 47.2 | 12.6% | 15.0% | +7.1% | +21% / −22% |
| ALABAstera Labs, Inc. | 31.4 bn | 71.6 | 28.2% | 29.6% | +115.1% | +14% / unavailable |
| IMOSChipMOS TECHNOLOGIES INC. | 29.7 bn | 676.0 | 5.6% | 6.3% | −0.8% | +55% / +64% |
| ONOn Semiconductor Corp | 24.5 bn | 36.6 | 8.9% | 10.8% | −15.3% | +25% / −12% |
| QQnity Electronics, Inc. | 23.0 bn | 38.9 | 7.6% | 11.5% | +9.7% | +36% / unavailable |
| CRDOCredo Technology Group Holding Ltd | 21.1 bn | 40.0 | 30.7% | 33.8% | +205.7% | −37% / +527% |
| FSLRFirst Solar, Inc. | 21.0 bn | 11.3 | 18.7% | 37.1% | +24.1% | −28% / +24% |
| MTSIMACOM Technology Solutions Holdings, Inc. | 14.5 bn | 60.9 | 17.2% | 20.7% | +32.6% | +9% / +127% |
| LSCCLattice Semiconductor Corp | 13.9 bn | 301.7 | 4.2% | 5.5% | unavailable | +40% / +67% |
| AMKRAmkor Technology, Inc. | 7.6 bn | 12.3 | 13.6% | 8.3% | +6.2% | −16% / +8% |
| CRUSCirrus Logic, Inc. | 5.5 bn | 13.9 | 19.5% | 20.2% | +5.3% | −8% / +45% |
| AAOIApplied Optoelectronics, Inc. | 4.3 bn | — | -2.3% | -4.4% | +82.8% | +75% / +254% |
| OSISOsi Systems, Inc. | 3.0 bn | 20.5 | 18.4% | 8.8% | +4.3% | −29% / +55% |
| AXTIAxt Inc | 2.4 bn | 1,792.4 | 0.8% | 3.2% | −11.1% | +304% / +1,497% |
1- and 3-year price returns: for AXTI from daily closes (the same as the performance table), for the other companies from month-end closes.
olivLaw engine forecast
The world engine ran after the company's latest material disclosure. Probabilities are of TOUCHING a level within the horizon (not closing there) and sit next to the random walk (p_rw), the no-information benchmark.
The engine has no published run for this company yet.
Valuation scenarios (editable assumptions)
Illustrative scenarios
Illustrative: not forecasts and without probabilities. Each case is one coherent set of assumptions, computed on today's figures.
Estimated price (USD)
| Estimated price | Bear | Base | Bull |
|---|---|---|---|
| 1 years | 59.25 Total return 61% · Per year 61% | 105.27 Total return 187% · Per year 187% | 159.29 Total return 334% · Per year 334% |
| 3 years | 47.04 Total return 28% · Per year 9% | 95.01 Total return 159% · Per year 37% | 159.29 Total return 334% · Per year 63% |
| 5 years | 37.35 Total return 2% · Per year 0% | 85.74 Total return 134% · Per year 18% | 159.29 Total return 334% · Per year 34% |
- Exit P/E± 23.75
- Net margin± 16.63
- Annual revenue growth± 15.02
- Annual dilution± 1.40
AI analysis
AI-generatedAI-generated analysis (Claude) from cited public sources; it may contain errors. Not investment advice. As of 27 Oct 2026 · Model: claude-haiku-5-5.
Possibly outdated: the newest document it read is from 13 Aug 2026; since then the company filed 8-K (29 Oct 2026 · results).
In brief
AXT is a materials science company that produces wafer substrates made from indium phosphide, gallium arsenide and germanium, used where silicon cannot meet performance requirements. In 2026 the company reports a sharp rise in revenue, driven by demand for optical connectivity in data centers, while China's export permit requirements remain a major uncertainty. Revenue in the second quarter of 2026 reached 47.6 million USD 3.
SWOT
Strengths
- Vertical integration with Chinese raw material suppliers offers, according to the company, advantages in pricing, secure supply and shorter lead times 1.
- The company focuses on specialty materials where silicon is not sufficient, a technical niche that is hard to replace in certain applications 1.
- The recent rise in revenue and gross margin in 2026 shows a strong recovery in activity 3.
Weaknesses
- Gross margins have fluctuated widely in recent years and were negative in the first quarter of 2025 1.
- Reliance on manufacturing in China exposes the company to tariffs, export controls and government interventions that are hard to anticipate 1.
- High fixed costs make capacity utilization essential for margins, and periods of weak demand lead to underutilization 1.
Opportunities
Threats
- Denial or delay of InP export permits could limit shipments to customers in Europe, Japan or the US 12.
- Trade tensions between China and the US and changing tariffs could negatively affect operations 1.
- Substitution of specialty substrates by silicon-based technologies could reduce demand for the company's products 1.
Risks
- InP export permitshigh
The timing of approvals for export permits from China is uncertain and outside the company's control, which can delay shipments 1.
- Tariffs and trade controlshigh
US tariffs and Chinese export controls can change quickly, and the company has paid tariffs in recent years 1.
- Tongmei redemption riskshigh
Private equity investors in Tongmei have redemption rights if the STAR Market IPO does not proceed, which could reduce the company's capital 1.
- Gross margin volatilitymedium
Gross margin has fluctuated sharply between quarters due to volume, product mix and manufacturing yields 1.
- Factory shutdowns due to pollutionmedium
Beijing authorities can order temporary factory shutdowns during severe pollution, which could reduce margins 1.
Investment thesis
What would need to be true (bull case)
- If demand for InP from data centers continues to grow, the company's revenue and margins could benefit from capacity expansion already achieved 13.
- Vertical integration with raw material suppliers may offer protection against material shortages, following the model described by the company 1.
- A niche position in specialty materials can make the company's products hard to replace in demanding performance applications 1.
What would break the thesis
- If InP export permits are delayed or refused, revenue could fall sharply, especially in its most important segment 12.
- The structure with operations in China and stakes in Chinese companies could expose the company to regulatory changes that are hard to anticipate 1.
- A history of volatile margins and past losses suggests financial performance could fall back quickly to weak levels 13.
What to watch
- Progress of InP export permits from ChinaQ3 2026
- Sustainability of gross margin after the revenue increaseQ3 2026
- Status of the Tongmei IPO and redemption rights2027
Products, market & competition
AI-generatedAI-generated analysis (Claude) from cited public sources; it may contain errors. Not investment advice. As of 27 Oct 2026 · Model: claude-haiku-5-5.
Possibly outdated: the newest document it read is from 13 Aug 2026; since then the company filed 8-K (29 Oct 2026 · results).
The business
AXT develops and produces compound and single element semiconductor substrates, called wafers, for applications where a typical silicon substrate is not sufficient. Products include indium phosphide (InP), gallium arsenide (GaAs) and germanium (Ge) 1. The company does not design or manufacture chips; it adds value by researching, developing and producing specialty material wafers 1.
The company has two product lines: specialty material substrates and the raw materials integral to them. The substrate group generated 67% of consolidated revenue in 2025 and the raw materials group 33% 1. Materials are manufactured in China through subsidiaries and joint ventures, and AXT holds partial stakes in several raw material suppliers 13.
Management presents the supply chain structure, with stakes in raw material companies, as an advantage in pricing and supply security, but it is also a source of risks tied to China, export controls and US tariffs 1.
Segments
Specialty material substrates
This line includes InP wafers for data center connectivity, 5G communications and fiber optic lasers, semi-insulating GaAs wafers for power amplifiers, semi-conducting GaAs wafers for LEDs and VCSELs, and Ge wafers for solar cells 1. The group generated 67% of consolidated revenue in 2025 1.
Market context
Specialty material substrates are used where silicon cannot reach the required speed, power or wavelength, from optical infrastructure and AI to LED lighting, satellites and solar cells 12. Demand for InP has risen in recent years, driven by data center expansion and AI applications, according to the company 2.
Trends
- Demand for optical connectivity in data centerstailwind
Growing AI applications require fast data transfer, which could increase demand for InP substrates used in data centers 1. In the second quarter of 2026 management reported its highest quarterly InP revenue to date 3.
- Export permits for InP from Chinaheadwind
Since February 2025 China has placed InP substrates on its export control list, and each shipment requires a permit; the timing of approvals is uncertain and outside the company's control 12. If permits are delayed, shipments and revenue could be affected.
- US tariffs and trade conflictmixed
US tariffs on wafer substrates from China rose to 70% in March 2025, and in February 2026 the Supreme Court invalidated many global tariffs, but other measures remain in effect 1. Later developments remain uncertain.
- Substitution by silicon and SOI technologiesheadwind
Silicon substrates cost much less than specialty ones, and silicon-on-insulator technology has already shifted GaAs demand in mobile phones; new silicon-based technologies could further reduce adoption of specialty substrates 1.
Competitive position
The supplied sources do not identify AXT's direct competitors in detail; they describe substitution competition, where silicon or technologies such as SOI can replace specialty substrates in some applications 1. The company differentiates through vertical integration with Chinese raw material suppliers 1.
Competitive risk is also tied to the ability to meet the requirements of top-tier customers, who set strict standards for defect density and wafer flatness; failing qualification can lead to lost sales 1.
- Silicon substrates and SOI technology
Silicon substrates, including silicon-on-insulator technology, are identified in the source as a cheaper alternative to GaAs and InP substrates in certain applications.
- Chinese raw material suppliers
Chinese companies producing gallium, germanium or pBN crucibles could compete in the market for raw materials sold to third parties, which AXT also sells.
- Asian GaAs and InP wafer producers
The sources do not name compound wafer competitors; they only mention the existence of producers in the region, without identification.
- Emerging substrate technologies
New silicon-based technologies could replace specialty substrates in some applications, an indirect form of competition.
Links, dependencies and risks
Who the company is tied to, from its own SEC filings (customers, suppliers, production, partners, competitors, countries, regulation), from the 5 %+ holders' statements (13D/13G) and from what other companies say about it. Click a node for its evidence; on a listed company the graph moves to it.
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News & filings
In the press
- AXT Inc. (AXTI) Climbs 16% on S&P 600 AdditionYahoo Finance — News · 21 Sept 2026 · EN
- AXT Inc. (AXTI) Draws Bullish Analyst Attention — Here’s WhyYahoo Finance — News · 17 Sept 2026 · EN
The latest news item in our archive is from 21 Sept 2026; the newest SEC filing is from 29 Oct 2026. The press archive comes from the RSS feeds we follow and does not necessarily cover the latest event — the filings alongside do.
SEC filings
- Current report29 Oct 2026Results of operations · Financial statements and exhibits
- Current report28 Oct 2026Material agreement · Regulation FD disclosure · Financial statements and exhibits
- Quarterly report13 Aug 2026
- Current report30 Jul 2026Results of operations · Financial statements and exhibits
- Current report29 Jul 2026Material agreement · Financial statements and exhibits
- Current report29 Jul 2026Item 3.03 · Amendments to articles or bylaws · Financial statements and exhibits
- Current report22 Jul 2026Departure or appointment of officers · Financial statements and exhibits
- Current report08 Jul 2026Item 2.04
- Current report02 Jul 2026Material agreement · Financial statements and exhibits
- Current report22 Jun 2026Departure or appointment of officers · Regulation FD disclosure · Financial statements and exhibits
Sources
- [1] Form 10-K, fiscal year ended 2025-12-31 · SEC / AXT, Inc. · 17 Mar 2026
- [2] Form 10-Q, quarter ended 2026-06-30 · SEC / AXT, Inc. · 13 Aug 2026
- [3] Form 8-K, results release (exhibit 99.1) · SEC / AXT, Inc. · 30 Jul 2026
Figures computed by olivLaw from SEC filings and closing prices; the qualitative analysis is AI-generated from cited sources. Not investment advice.