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AXT
(NASDAQ:AXTI)
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Rating:70Outperform
Price Target:
$90.00
▲(90.56% Upside)
Action:Upgraded
Date:08/18/26
AXTI scores well on technical strength and a notably positive earnings inflection (record results and upbeat Q3 guidance), supported by a low-leverage balance sheet. The score is held back by weak cash flow (negative operating and free cash flow) and an extremely high P/E that leaves little margin for execution issues, especially given export-permit and China concentration risks.
Positive Factors
Indium Phosphide Growth
Strong InP demand from data-center and optical applications supports a durable growth vector. Rising sales, backlog and planned capacity expansion could broaden AXT’s role in higher-value compound semiconductor supply chains.
Negative Factors
Negative Cash Generation
Despite renewed accounting profitability, AXT is still consuming cash. Persistent divergence between earnings and cash generation can signal working-capital demands or heavy investment, limiting internally funded growth and financial flexibility.
Read all positive and negative factors
Positive Factors
Negative Factors
Indium Phosphide Growth
Strong InP demand from data-center and optical applications supports a durable growth vector. Rising sales, backlog and planned capacity expansion could broaden AXT’s role in higher-value compound semiconductor supply chains.
Read all positive factors
AXT Key Performance Indicators (KPIs)
Any
Revenue by Segment
Breaks revenue into the company’s product lines or business units, highlighting which offerings drive growth and profits and which are more cyclical or margin-sensitive. Understanding segment mix helps investors see where management is investing, identify dependency on a single product or customer group, and gauge the resilience of future revenues.
Breaks revenue into the company’s product lines or business units, highlighting which offerings drive growth and profits and which are more cyclical or margin-sensitive. Understanding segment mix helps investors see where management is investing, identify dependency on a single product or customer group, and gauge the resilience of future revenues.
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The Fly
The FlyAXT (AXTI) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$5.40B
Dividend YieldN/A
Average Volume (3M)8.92M
Price to Earnings (P/E)3072.4
Beta (1Y)2.57
Revenue Growth45.81%
EPS GrowthN/A
CountryUS
Employees1,541
SectorTechnology
Sector Strength88
IndustrySemiconductors
Share Statistics
EPS (TTM)0.02
Shares Outstanding65,573,210
10 Day Avg. Volume7,842,802
30 Day Avg. Volume8,916,073
Financial Highlights & Ratios
PEG Ratio-0.41
Price to Book (P/B)2.63
Price to Sales (P/S)8.13
P/FCF Ratio-38.25
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$90.75Price Target Upside92.14% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering5
EPS Forecast (FY)0.3
Revenue Forecast (FY)$143.08M
AXT Business Overview & Revenue Model
Company Description
AXT, Inc. is a company dedicated to the design, development, production, and worldwide distribution of both compound and single-element semiconductor substrates. Leveraging its proprietary vertical gradient freeze technology, the firm manufactures...
How the Company Makes Money
AXT makes money primarily by manufacturing and selling compound semiconductor substrates to customers that use these wafers as the starting material for fabricating devices (e.g., RF components, lasers, photonics, and other compound-semiconductor-...
AXT Earnings Call Summary
Earnings Call Date:Jul 30, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Oct 29, 2026
Earnings Call Sentiment Positive
The call presents a markedly positive operational and financial inflection: record revenue, historic indium phosphide sales, large gross margin expansion, return to profitability, strong cash from a secondary offering, and accelerating capacity and customer agreements. Principal risks highlighted are dependence on export permits, increased exposure to China, some opacity around backlog booking, and the need to manage operating/CapEx as capacity scales. On balance, the strength of revenue, margins, cash and customer commitments significantly outweighs the challenges.Positive Updates
Record Quarterly Revenue
Revenue of $47.6M in Q2 2026 — the highest quarterly revenue in company history — up ~77% sequentially from $26.9M in Q1 2026 and up 164% year-over-year from $18.0M in Q2 2025.
Negative Updates
Export Permit Uncertainty
Recognition of some revenue, especially for shipments outside China, depends on obtaining export permits from Chinese authorities; management states timing and certainty of permits remain unpredictable and could limit near-term revenue recognition despite inventory.
Read all updates
Q2-2026 Updates
Positive
Negative
Record Quarterly Revenue
Revenue of $47.6M in Q2 2026 — the highest quarterly revenue in company history — up ~77% sequentially from $26.9M in Q1 2026 and up 164% year-over-year from $18.0M in Q2 2025.
Read all positive updates
Company Guidance
AXT guided Q3 revenue of approximately $66.0 million that management has a high degree of confidence in recognizing (with potential upside if additional export permits are obtained); non‑GAAP operating expense is expected to be about $10.5 million (GAAP ≈ $11.0 million), non‑GAAP net income $0.30–$0.32 per diluted share (GAAP $0.29–$0.31) on an estimated ~66.5 million diluted shares. Management highlighted Q2 non‑GAAP gross margin of 45.0% (GAAP 44.9%) and expects to remain above 40% with further upside from mix, volume and efficiency gains; backlog is >$100 million, indium phosphide revenue is on track to more than triple by end‑2026, quarterly indium phosphide capacity is targeted at roughly $60 million by year‑end and about $130 million exiting 2027. The company also noted cash, cash equivalents and investments of $749 million as of June 30 (up ≈ $626 million during Q2), prepayments of $22.3M and $25.4M under long‑term supply agreements, net inventory ≈ $96.3M, depreciation ≈ $2.5M and total stock comp ≈ $0.8M, and said its CapEx plans remain consistent with prior guidance (no material increase beyond the previously communicated levels).AXT Financial Statement Overview
Summary
Income Statement
58
Neutral
Balance Sheet
78
Positive
Cash Flow
33
Negative
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 125.51M | 88.33M | 99.36M | 75.80M | 141.12M | 137.39M |
| Gross Profit | 40.39M | 11.24M | 23.84M | 13.32M | 52.12M | 47.41M |
| EBITDA | 14.61M | -11.18M | -338.00K | -8.78M | 30.12M | 25.10M |
| Net Income | 4.05M | -21.26M | -11.62M | -17.88M | 15.81M | 14.57M |
Balance Sheet | ||||||
| Total Assets | 1.10B | 433.75M | 339.31M | 358.70M | 370.07M | 332.44M |
| Cash, Cash Equivalents and Short-Term Investments | 417.20M | 120.27M | 22.83M | 39.89M | 44.29M | 42.18M |
| Total Debt | 85.40M | 64.82M | 49.78M | 55.73M | 48.88M | 16.54M |
| Total Liabilities | 145.34M | 99.12M | 84.41M | 89.56M | 80.33M | 52.21M |
| Stockholders Equity | 887.27M | 273.29M | 192.77M | 203.99M | 221.61M | 211.53M |
Cash Flow | ||||||
| Free Cash Flow | -19.57M | -18.78M | -17.88M | -7.07M | -37.23M | -32.95M |
| Operating Cash Flow | -5.76M | -12.78M | -12.11M | 3.40M | -8.77M | -3.31M |
| Investing Cash Flow | -319.37M | -6.83M | -4.45M | -2.60M | -25.22M | -38.81M |
| Financing Cash Flow | 729.88M | 107.09M | -536.00K | 8.61M | 38.03M | 5.72M |
AXT Technical Analysis
Positive
47.23
Price Trends
68.51
Positive
79.27
Negative
51.40
Positive
Market Momentum
5.28
Negative
51.45
Neutral
50.39
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AXTI, the sentiment is Positive. The current price of 47.23 is below the 20-day moving average (MA) of 66.91, below the 50-day MA of 68.51, and below the 200-day MA of 51.40, indicating a bullish trend. The MACD of 5.28 indicates Negative momentum. The RSI at 51.45 is Neutral, neither overbought nor oversold. The STOCH value of 50.39 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AXTI.
AXT Risk Analysis
AXT disclosed 64 risk factors in its most recent earnings report. AXT reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
AXT Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
83 Outperform | $555.21M | 29.91 | 30.53% | 3.40% | 24.07% | 23.86% | |
70 Outperform | $5.40B | 3,072.38 | 1.00% | ― | 45.81% | ― | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
61 Neutral | $449.26M | -161.18 | -3.79% | ― | 20.89% | -240.91% | |
60 Neutral | $315.55M | -9.22 | -7.84% | ― | -3.87% | -946.99% | |
53 Neutral | $198.14M | -5.84 | -31.56% | ― | 7.68% | 0.83% | |
47 Neutral | $192.00M | -7.17 | -77.91% | ― | 369.39% | 1.34% |
* Technology Sector Average
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AXT Corporate Events
Business Operations and StrategyShareholder Meetings
AXT Updates Bylaws, Lowers Shareholder Meeting Quorum
Positive
Jul 29, 2026
On July 26, 2026, AXT, Inc.’s Board of Directors approved an immediate amendment to the company’s Second Amended and Restated Bylaws, changing the shareholder meeting quorum requirement. The threshold was reduced from a majority of sha...
Business Operations and Strategy
AXT Secures Long-Term Indium Phosphide Supply Agreement
Positive
Jul 29, 2026
On July 26, 2026, AXT Inc. entered into a long-term capacity reservation agreement with Lumentum Operations LLC for the supply of indium phosphide wafer substrates, running through December 31, 2031. AXT will reserve minimum annual product capacit...
Business Operations and StrategyExecutive/Board Changes
AXT Expands Board, Adds Independent Director for Growth
Positive
Jul 22, 2026
On July 16, 2026, AXT’s board of directors expanded from five to six members and elected Jia-Bin Duh as an independent Class III director, a move formally announced in a July 22, 2026 press release. Duh will serve on the audit, compensation,...
Business Operations and StrategyDelistings and Listing ChangesPrivate Placements and Financing
AXT’s Tongmei shifts IPO focus to Hong Kong
Positive
Jul 8, 2026
On June 26, 2026, Tongmei withdrew its long-pending application for an IPO on the Shanghai Stock Exchange’s STAR Market, a move acknowledged by the bourse on July 8, 2026, and shifted its listing focus to the Hong Kong Stock Exchange. The pl...
Business Operations and StrategyPrivate Placements and Financing
AXT Signs Major InP Wafer Supply Agreement
Positive
Jul 2, 2026
On June 25, 2026, AXT-Tongmei entered into a three-year Master Development and Supply Agreement with Coherent Corp. to develop and mass supply 6-inch indium phosphide wafer substrates. Under the deal, AXT will expand manufacturing capacity at its ...
Business Operations and StrategyExecutive/Board Changes
AXT appoints Tracy Liu to expanded board
Positive
Jun 22, 2026
On June 17, 2026, AXT’s board expanded from four to five directors and elected tax and accounting specialist Tracy Liu as an independent Class II director, with her term running to the 2028 annual meeting and roles on the audit, compensation...
Business Operations and StrategyFinancial Disclosures
AXT Subsidiary Signs Long-Term Indium Phosphide Supply Deal
Positive
Jun 17, 2026
On June 11, 2026, AXT subsidiary Beijing Tongmei Xtal Technology Co., Ltd. signed a long-term supply agreement with Nanjing Casela Technologies Corporation, Ltd. to provide indium phosphide wafer substrates throughout 2027. Tongmei will reserve pr...
Business Operations and StrategyExecutive/Board ChangesShareholder Meetings
AXT Shareholders Approve Governance Changes and Share Increase
Positive
Jun 9, 2026
At AXT’s Annual Meeting of Stockholders on June 4, 2026, shareholders elected Class I directors Morris Young and David Chang to new three-year terms, with Young securing over 98% support and Chang about 85%, and approved on an advisory basis...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.