AXT Inc

AXT soared again on Monday to lead optics stocks, with Coherent and Lumentum rallying on indium phosphide price hikes. AXT climbed 13.71% intraday to $92.83, extending a year-to-date gain of 399.33%, while Coherent rose 8.12% and Lumentum added 6.79%. The catalyst was a United Daily News report of Q4 indium phosphide substrate price increases topping 10%, the largest on record, versus earlier expectations of 3% to 5%. AXT's Q2 2026 revenue hit $47.6 million, up 164% year over year, with indium phosphide revenue at a record $30.7 million and non-GAAP gross margin of 45.0%. Coherent guided fiscal Q1 revenue to $2.2 billion to $2.4 billion, and Lumentum guided Q1 revenue to roughly $1.25 billion. WOLF climbs 6% Monday as a Mizuho note flags strong VR200 NVL72 ramps, adding a power-supply tailwind to the broader optics surge. NVIDIA disclosed a $3 billion stake in Coherent equal to nearly 5% of its 13F portfolio, and D.E. Shaw holds 2.25 million AXTI shares.

AXT, T1 Energy, and Babcock & Wilcox Enterprises all moved sharply higher on Friday, driven by AI-related demand and new U.S. solar tariffs. AXT rose about 3.1% to around $79.83, lifted by a broad rally in optical connectivity names, after reporting Q2 FY26 revenue of $47.59 million, up 164.8% year over year. T1 Energy jumped about 9.5% as new U.S. solar tariffs and a possible polysilicon price floor protect its domestic manufacturing plans, following Q2 revenue of $250.13 million that beat consensus by roughly 26%. Babcock & Wilcox gained 11% after Ameriprise Financial disclosed a 7.66 million-share position, and the company announced work on 20 steam turbines with Siemens Energy for data center power, with Q2 revenue up 121.9% year over year to $319.7 million.

Leveraged single-stock ETFs tied to Microsoft, AXT, UiPath, and Amazon posted sharp gains last week following strong earnings reports. The Direxion Daily MSFT Bull 2X ETF rose 38.9% as Microsoft shares jumped 19% after better-than-expected fiscal fourth-quarter 2026 results driven by Azure growth and AI demand. The Tradr 2X Long AXTI Daily ETF gained 35.4% as AXT shares surged 24.7% on a blowout second-quarter 2026 report with record indium phosphide revenues. The Tradr 2X Long PATH Daily ETF advanced 32.6% as UiPath shares climbed 14.2% on strong enterprise demand for AI-driven automation. The GraniteShares 2x Long AMZN Daily ETF added 31.0% as Amazon shares rose 15.3% after an AWS-fueled earnings beat that sent the stock up 10% immediately, with AWS revenue jumping 37% and its AI business and chips each generating over $25 billion in annualized revenue.

Stock futures edged higher Friday morning, positioning major benchmarks for a positive weekly close as investors digested a wave of rate guidance and tech earnings. Amazon shares surged 12% after delivering a broad Q2 beat, with revenue rising 20% to $200.6 billion and AWS revenue jumping 37% to $42.2 billion, its fastest growth in 18 quarters, while operating income of $27.5 billion far exceeded guidance. AXT soared 25% after reporting Q2 results that topped expectations, with revenue soaring 160% year-over-year and gross margin expanding to 44.9% from 8% a year earlier, driven by record indium phosphide revenue from data center optical connectivity and AI infrastructure. Apple shares plunged 7% despite posting a Q3 beat on revenue and earnings, as weaker-than-expected Services revenue of $30.7 billion and Greater China revenue of $18.8 billion overshadowed strong iPhone and Mac sales. Roblox sank 16% after missing key Q2 engagement metrics and issuing weaker-than-expected Q3 guidance, with daily active users, bookings, and hours engaged all falling short of estimates, and the company withdrew full-year guidance.

AXT, Inc. has appointed Jia-Bin Duh to its Board of Directors, effective July 16, 2026, expanding the board from five to six members. Duh brings over 30 years of senior executive leadership and investor experience across the technology and consumer sectors, with deep expertise in international business operations and Greater China markets. He previously served as President of Microsoft China from 1993 to 1998 and President of Cisco Systems China from 1998 to 2005, and currently serves as Director of Primax Electronics Ltd. AXT is a leading manufacturer of compound semiconductor wafer substrates used in AI/data center connectivity, 5G infrastructure, and other applications.

AXT is positioning itself to benefit from co-packaged optics, a technology that could become its next revenue pillar as AI data center connectivity evolves. Management expects CPO adoption to accelerate, with commercial opportunities likely emerging from late 2027 onward, and is expanding indium phosphide production capacity through 2028 while advancing 6-inch InP wafer technology. A record InP backlog and a multi-year supply agreement with Coherent, backed by a $22.3 million customer prepayment, provide better visibility into future demand. The Zacks Consensus Estimate projects 2027 revenues of $211.85 million, representing 49.8% year-over-year growth. Shares of AXT have soared 245.6% year-to-date, though the stock trades at a trailing 12-month price-to-sales ratio of 31.42, significantly above the industry average of 14.38.

AXT has appointed Tracy Liu to its board of directors, effective June 17, 2026, expanding the board from four to five members. Liu brings more than 30 years of business advisory, tax strategy, and accounting experience, including a decade with Big Four public accounting firms and over 20 years advising public and private companies. Separately, on June 18, AXT disclosed that its subsidiary Beijing Tongmei Xtal Technology entered into a long-term supply agreement with Nanjing Casela Technologies, under which Casela committed to purchase a fixed aggregate quantity of indium phosphide wafer substrates for a total price of $25.4 million during 2027. Northland reiterated an Outperform rating on AXT and recently raised its price target to $125, citing a sharp pullback in the shares and a positive appearance at the firm's NCM Growth Conference.

AXT's subsidiary AXT-Tongmei has entered into a three-year agreement with Coherent to develop and supply 6-inch indium phosphide wafer substrates. Under the deal, AXT will expand production capacity at its Beijing facility between 2026 and 2028 and commit output to Coherent. Coherent will make a prepayment of about $22.29 million, which will be applied towards future wafer purchases. The prepayment is refundable at Coherent's option if not fully used by the end of the agreement, but becomes non-refundable if Coherent fails to meet its minimum order requirements, in which case AXT may terminate the agreement. Coherent can also terminate the deal if AXT fails to meet capacity commitments for more than six consecutive months, with refund rights for any unused prepayment.

AXT and Diodes are both benefiting from the AI-driven semiconductor upcycle, but AXT's direct exposure to hyperscale AI infrastructure makes its long-term story more compelling. AXT's first-quarter revenues grew 39% year over year to $26.9 million, with Indium Phosphide revenues of $13.6 million driven by optical transceivers for AI data centers, and management disclosed a record backlog exceeding $100 million. Diodes reported first-quarter revenues up 22% to $405.5 million, with automotive and industrial accounting for 44% of product revenues, though its diversified model yields more moderate growth. AXTI trades at a forward price-to-sales ratio of 29.5X, well above the industry average of 9.95X, while DIOD trades at 3.17X. Despite the premium valuation, AXT's aggressive capacity expansion and direct AI leverage position it as the more attractive emerging semiconductor stock.

AXT Inc. is poised for what management says could be its strongest-ever quarter for Indium Phosphide revenues, driven by surging AI infrastructure demand and improving shipment visibility. The company reported $13.6 million in Indium Phosphide revenues in the first quarter and has already secured approximately $34 million in second-quarter revenues through shipments with export permits or that do not require permits, giving it unusually high confidence in near-term execution. An Indium Phosphide backlog exceeding $100 million, the highest in the company's history, supports the anticipated growth, while China-related Indium Phosphide revenues more than doubled in the first quarter and are expected to double again in the ongoing quarter. Management noted that additional export permit approvals could generate significant incremental revenues above the $34 million baseline, potentially enabling a record quarter.

AXT's agreement to supply China's Nanjing Casela with Indium Phosphide substrates is significant for multiple reasons, according to Wedbush Securities. Analyst Matt Bryson noted the contract represents close to 20% of the firm's modeled 2027 InP substrate revenues and limits export license risk given the sale is to a Chinese entity, as well as customer default or payment probability. AXT disclosed that its Tongmei subsidiary signed a long-term agreement to provide Casela with Indium Phosphide substrates throughout 2027, with Casela committing to roughly $25.4 million worth of wafers on a monthly schedule, 50% prepaid within 15 business days and the balance by the end of 2026. AXT shares rose 7.3% in premarket trading on Monday.