Shares of AXT Inc. bounced 6.4% to $61.86 on Tuesday, as short-term traders piled back in after a brutal multi-day selloff that slashed the stock from a $72.08 close on June 30 to $58.15 on Monday. The catalyst remains the same: a three-year Master Development and Supply Agreement with Coherent Corp., signed June 25, under which AXT will expand manufacturing capacity at its Beijing facility from 2026 through 2028 and dedicate agreed production volume to Coherent. No new company-specific news drove today's move — this is a momentum trade on a stock that has been swinging wildly.
A $22 Million Prepayment Is Real Cash, But Small Against the Stock's Run
Coherent provided a prepayment of $22.3 million , which AXT will apply against future wafer purchases. That money directly funds capacity expansion, reducing the dilution risk from AXT's recent $632.5 million capital raise. That raise supports its subsidiary Tongmei's indium phosphide capacity expansion and R&D investment in 6-inch wafers. Still, $22 million is a modest sum for a company now carrying a market capitalization of $4.06 billion.
The Stock Is Still Down Nearly 50% From Its June Peak
From $88.34 on June 11, the stock spiked to a $110.74 close on June 15, then slid into the $60s by early July.
AXT has returned 3,486% over the past year — a staggering run driven by AI data-center demand for its indium phosphide wafers, which enable the high-speed optical connections that link AI chips together. Director Jesse Chen sold roughly $2.75 million in stock during mid-June , a reminder that insiders are cashing in.
The Fundamentals Haven't Caught Up to the Story
Trailing revenue sits around $88.3 million, and margins are negative across the board, with an operating margin near -13%.
AXT posted a quarterly net loss of about $1.62 million and negative operating cash flow near $11.68 million. The bull case rests on the Coherent deal plus a separate $25.4 million wafer contract with Nanjing Casela as proof that real orders are stacking up. Northland Capital reiterated its Outperform rating and hiked its price target to $125 , roughly double the current price.
China Export Permits Remain the Wild Card
AXT previously missed revenue expectations because fewer export-control permits for indium phosphide were issued by China's Ministry of Commerce than expected. Since all manufacturing sits in Beijing, any tightening of export approvals could choke off the supply deals investors are pricing in. Today's bounce is a bet that demand is real — but for shareholders, execution and permits, not momentum, will determine whether AXT grows into its valuation.