AXT (NASDAQ:AXTI) Issues Quarterly Earnings Results

AXT (NASDAQ:AXTI) released its quarterly earnings results on Thursday. The semiconductor company reported $0.19 EPS for the quarter, beating analysts’ consensus estimates of $0.07 by $0.12, FiscalAI reports. AXT had a negative net margin of 14.69% and a negative return on equity of 5.71%. The company had revenue of $47.59 million for the quarter, compared to analyst estimates of $34.08 million. AXT updated its Q3 2026 guidance to 0.300-0.320 EPS.

Here are the key takeaways from AXT’s conference call:

• Record Q2 results: Revenue reached $47.6 million, up 77% sequentially and 164% year over year, while non-GAAP net income was $11.9 million, or $0.19 per diluted share. Non-GAAP gross margin improved to 45.0% from 29.9% in Q1.
• Demand for indium phosphide substrates, driven primarily by AI data-center optical connectivity, is substantially exceeding supply. The company plans to lift quarterly indium phosphide capacity to approximately $60 million by year-end 2026 and potentially around $130 million by the end of 2027, with backlog above $100 million.
• AXT signed long-term supply agreements with Casela, Coherent, and Lumentum, including $47.7 million in wafer prepayments from Casela and Coherent. Management said these agreements support confidence in the capacity expansion and expect their revenue contribution to increase from Q3 onward.
• Management guided to approximately $66 million of Q3 revenue that is already supported by permits or does not require permits, with non-GAAP earnings of $0.30–$0.32 per share. Further upside is possible if additional export permits are secured, although permit timing remains uncertain.
• Tongmei shifted its planned listing from China’s STAR Market to the Hong Kong Exchange, a process expected to take about a year. The move creates a potential $49 million redemption right for private-equity investors, though management said investors currently want to remain invested and AXT has sufficient cash if redemption is requested.

AXT Stock Performance

Shares of AXTI traded up $13.49 during mid-day trading on Friday, hitting $60.43. The company’s stock had a trading volume of 29,492,095 shares, compared to its average volume of 10,203,104. AXT has a one year low of $1.85 and a one year high of $143.16. The firm has a market capitalization of $3.95 billion, a PE ratio of -194.93 and a beta of 1.86. The stock’s 50-day moving average is $77.44 and its two-hundred day moving average is $61.74.

Key AXT News

Here are the key news stories impacting AXT this week:

• Positive Sentiment: Q2 earnings beat expectations: AXT reported quarterly revenue of approximately $47.6 million, well above the roughly $34 million consensus estimate, while EPS of $0.19 exceeded expectations of $0.07. Results were supported by record indium phosphide demand, improved productivity and stronger profitability. AXTI Q2 Earnings Beat on Record InP Demand, Revenues Rise Y/Y
• Positive Sentiment: Very bullish Q3 outlook: Management guided for third-quarter EPS of $0.30–$0.32 and revenue of about $66 million, substantially above analyst estimates of approximately $0.10 EPS and $38.7 million in revenue. The outlook suggests momentum is continuing into the second half of the year.
• Positive Sentiment: AI infrastructure demand is driving expansion: AXT highlighted accelerating demand from data-center optical connectivity and plans to expand capacity, potentially supporting higher production volumes and margins. AXTI Q2 Earnings Call Highlights AI Capacity Expansion
• Positive Sentiment: Analyst upgrade and customer agreement: Needham upgraded AXTI from Hold to Buy and assigned a $90 price target. Separately, AXT entered a long-term indium phosphide supply and capacity-reservation agreement with Lumentum, improving demand visibility. Needham Upgrades AXT to Buy
• Neutral Sentiment: Options activity was elevated: Traders bought 43,167 call options, about 29% above average call volume, indicating increased speculative and potentially bullish interest but not guaranteeing further gains.
• Negative Sentiment: Insider selling remains a risk: Reported insider activity over the past six months showed sales by executives and directors, with no purchases. This may temper enthusiasm despite the earnings-driven rally.

Insider Transactions at AXT

In related news, CEO Morris S. Young sold 123,601 shares of the business’s stock in a transaction on Tuesday, June 2nd. The shares were sold at an average price of $113.33, for a total transaction of $14,007,701.33. Following the transaction, the chief executive officer owned 2,149,533 shares of the company’s stock, valued at approximately $243,606,574.89. The trade was a 5.44% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the SEC, which is available through this hyperlink. Also, Director Jesse Chen sold 6,172 shares of the company’s stock in a transaction on Monday, June 15th. The shares were sold at an average price of $115.24, for a total transaction of $711,261.28. Following the transaction, the director owned 50,275 shares of the company’s stock, valued at approximately $5,793,691. The trade was a 10.93% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Over the last quarter, insiders have sold 251,636 shares of company stock worth $27,789,677. Insiders own 5.97% of the company’s stock.

Institutional Inflows and Outflows

Institutional investors and hedge funds have recently made changes to their positions in the stock. XTX Topco Ltd bought a new stake in shares of AXT in the second quarter valued at about $42,000. Jefferies Financial Group Inc. acquired a new stake in AXT during the third quarter worth about $52,000. State of Wyoming bought a new position in AXT during the fourth quarter valued at about $69,000. Creative Planning bought a new position in AXT during the second quarter valued at about $86,000. Finally, Kestra Advisory Services LLC acquired a new position in AXT in the 4th quarter valued at approximately $98,000. Institutional investors own 49.52% of the company’s stock.

Analyst Ratings Changes

Several analysts recently issued reports on AXTI shares. B. Riley Financial decreased their price objective on shares of AXT from $73.00 to $52.00 and set a “neutral” rating for the company in a report on Tuesday. Northland Securities set a $125.00 target price on shares of AXT in a report on Wednesday, June 3rd. Weiss Ratings raised shares of AXT from a “sell (e+)” rating to a “sell (d-)” rating in a research report on Wednesday, May 27th. UBS Group set a $90.00 price target on shares of AXT in a report on Friday. Finally, Needham & Company LLC raised AXT from a “hold” rating to a “buy” rating and set a $90.00 price target on the stock in a research report on Friday. Three analysts have rated the stock with a Buy rating, one has issued a Hold rating and one has assigned a Sell rating to the stock. According to data from MarketBeat, AXT currently has an average rating of “Hold” and a consensus target price of $77.00.

AXT Company Profile

AXT, Inc (NASDAQ: AXTI) is a global supplier of compound and single-element semiconductor substrates, offering a range of materials critical for high-performance electronic and optoelectronic devices. Founded in 1986 and headquartered in Fremont, California, AXT specializes in the development, manufacture and distribution of wafers composed of gallium arsenide (GaAs), indium phosphide (InP), gallium nitride (GaN) and other compound semiconductor materials. These substrates serve as the foundational platforms for devices used in data communications, wireless infrastructure, advanced computing, consumer electronics and photovoltaic applications.

AXT’s product portfolio encompasses a variety of wafer sizes, dopant concentrations and crystal orientations, tailored to meet the precise specifications of its customers.