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AXT Inc (AXTI)
NASDAQ:AXTI
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AXT (AXTI) AI Stock Analysis

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AXTI

AXT

(NASDAQ:AXTI)

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Neutral 56 (OpenAI - 4o)
Rating:56Neutral
Price Target:
$5.50
▲(5.16% Upside)
AXT's overall stock score is primarily impacted by its financial performance challenges, including declining revenue and negative profit margins. While technical analysis indicates a bullish trend, the valuation remains unattractive due to negative earnings. The mixed results from the earnings call further highlight the company's operational and geopolitical challenges, affecting investor sentiment.
Positive Factors
AI-Related Demand
The surge in AI-related demand for indium phosphide substrates indicates a strong market opportunity, potentially driving long-term revenue growth and solidifying AXT's position in the semiconductor industry.
Export License Acquisition
Securing an export license for indium phosphide allows AXT to expand its market reach beyond China, potentially increasing revenue and reducing geopolitical risks.
Gross Margin Improvement
The improvement in gross margins reflects successful cost management and operational efficiency efforts, which can enhance profitability and financial stability over time.
Negative Factors
Overall Revenue Decline
The decline in revenue suggests challenges in maintaining sales momentum, which could impact long-term growth prospects and market competitiveness.
Continued Net Losses
Ongoing net losses indicate financial instability and may hinder AXT's ability to invest in growth initiatives, affecting future profitability and shareholder value.
Geopolitical and Regulatory Challenges
Geopolitical and regulatory challenges can disrupt operations and supply chains, potentially leading to revenue volatility and increased operational risks.

AXT (AXTI) vs. SPDR S&P 500 ETF (SPY)

AXT Business Overview & Revenue Model

Company DescriptionAXT, Inc. designs, develops, manufactures, and distributes compound and single element semiconductor substrates. It produces semiconductor substrates using its proprietary vertical gradient freeze technology. The company offers indium phosphide for use in data center connectivity using light/lasers, 5G communications, fiber optic lasers and detectors, passive optical networks, silicon photonics, photonic integrated circuits, terrestrial solar cells, RF amplifier and switching, infrared light-emitting diode (LEDS) motion control, lidar for robotics and autonomous vehicles, and infrared thermal imaging. It also provides semi-insulating gallium arsenide (GaAs) substrates for use in Wi-Fi and IoT devices, transistors, direct broadcast television, power amplifiers, satellite communications, and solar cells; and semi-conducting GaAs substrates that are used in LED, screen displays, printer head lasers and LEDs, 3-D sensing using VCSELs, data center communication using VCSELs, sensors for industrial robotics/near-infrared sensors, optical couplers, solar cells, night vision goggles, lidar for robotics and autonomous vehicles, and other lasers, as well as laser machining, cutting, and drilling. In addition, the company offers germanium substrates for use in multi-junction solar cells for satellites, optical sensors and detectors, terrestrial concentrated photo voltaic cells, infrared detectors, and carrier wafer for LED. Further, it provides 6N+ and 7N+ purified gallium, boron trioxide, gallium-magnesium alloy, pyrolytic boron nitride (pBN) crucibles, and pBN insulating parts. AXT, Inc. sells its products through direct salesforce in the United States, China, and Europe, as well as through independent sales representatives and distributors in Japan, Taiwan, Korea, and internationally. The company was formerly known as American Xtal Technology, Inc. and changed its name to AXT, Inc. in July 2000. AXT, Inc. was incorporated in 1986 and is headquartered in Fremont, California.
How the Company Makes MoneyAXT generates revenue through the sale of its semiconductor substrates, with key revenue streams coming from its high-purity InP and GaAs substrates. The company markets its products to a diverse range of customers, including manufacturers of optoelectronic devices and technology firms involved in telecommunications and data communications. AXT's revenue model is primarily driven by product sales, with pricing influenced by market demand and technological advancements. Additionally, strategic partnerships with key industry players and ongoing investment in research and development contribute to enhancing its product offerings and expanding its market reach, ultimately supporting its earnings.

AXT Earnings Call Summary

Earnings Call Date:Jul 31, 2025
(Q2-2025)
|
% Change Since: |
Next Earnings Date:Oct 30, 2025
Earnings Call Sentiment Neutral
The earnings call revealed mixed results. There were positive developments in margin recovery and AI-driven demand, but these were overshadowed by declining overall revenue, continued net losses, and significant delays in export permits due to geopolitical issues.
Q2-2025 Updates
Positive Updates
Improvement in Gross Margin
Non-GAAP gross margin improved to 8.2% in Q2 2025 from negative 6.1% in Q1, showcasing significant recovery efforts.
Sequential Revenue Growth Expected
Projected revenue for Q3 2025 is expected to grow to a range of $19.0 million to $21.0 million.
AI-Related Demand Surge
Significant growth in AI-related demand for indium phosphide substrates in China, with expectations of continued growth.
Export License for Indium Phosphide
First export license for indium phosphide obtained in June, enabling $700,000 in shipments to non-China customers.
Negative Updates
Overall Revenue Decline
Q2 2025 revenue decreased to $18.0 million from $19.4 million in Q1 2025 and $27.9 million in Q2 2024.
Continued Net Losses
Non-GAAP net loss of $6.4 million in Q2 2025, compared to a net loss of $8.2 million in Q1 2025.
Export Permit Delays
Delays in gallium arsenide export permits impacted revenue, with a significant backlog of orders still unfulfilled.
Geopolitical and Regulatory Challenges
Ongoing trade restrictions and geopolitical tensions have posed significant challenges to operations and revenue generation.
Company Guidance
During the AXT Inc.'s Second Quarter 2025 Financial Conference Call, guidance for the upcoming quarter was provided by Gary Fischer, the CFO. The company expects third-quarter revenue to range from $19.0 million to $21.0 million, showing potential growth from the $18.0 million reported in Q2 2025. This expectation includes modest contributions from indium phosphide and gallium arsenide sales outside China, while germanium revenue is projected to decline, and raw material business is expected to remain flat. AXT is focusing on gross margin improvement, projecting margins to be in the low to mid-teens for Q3. The anticipated non-GAAP net loss is between $0.11 to $0.13 per share, with a GAAP net loss expected in the range of $0.13 to $0.15 per share, based on approximately 43.8 million shares outstanding.

AXT Financial Statement Overview

Summary
AXT is facing financial challenges with declining revenue and profitability, negative cash flow, and operational inefficiencies. Despite a stable balance sheet with moderate leverage, the negative net profit and EBIT margins, along with poor cash conversion efficiency, highlight significant financial concerns.
Income Statement
45
Neutral
AXT has faced a challenging period with declining revenue over the last year, dropping from $99.36M to $96.03M on a TTM basis. The company exhibits negative net profit and EBIT margins, indicating operational inefficiencies. Gross profit margin has also decreased from 23.99% to 17.18%, showing reduced profitability. These factors suggest weak income statement performance.
Balance Sheet
55
Neutral
AXT maintains a relatively healthy balance sheet with a debt-to-equity ratio of 0.30, reflecting moderate leverage. The equity ratio stands at 55.50%, indicating a solid equity base. However, the return on equity has turned negative, highlighting profitability concerns. Overall, the balance sheet shows financial stability but is impacted by profitability issues.
Cash Flow
50
Neutral
The cash flow statement reveals negative free cash flow, although the free cash flow has slightly improved from the previous year. Operating cash flow remains negative, signaling ongoing cash management challenges. The free cash flow to net income ratio is concerning, as both figures are negative, indicating poor cash conversion efficiency.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue86.08M99.36M75.80M141.12M137.39M95.36M
Gross Profit10.28M23.84M13.32M52.12M47.41M30.27M
EBITDA-14.64M-338.00K-8.78M30.12M25.10M11.63M
Net Income-23.83M-11.62M-17.88M15.81M14.57M3.24M
Balance Sheet
Total Assets329.00M339.31M358.70M370.07M332.44M298.86M
Cash, Cash Equivalents and Short-Term Investments35.11M22.83M39.89M44.29M42.18M72.84M
Total Debt58.19M49.78M55.73M48.88M16.54M13.23M
Total Liabilities88.37M84.41M89.56M80.33M52.21M43.33M
Stockholders Equity179.71M192.77M203.99M221.61M211.53M192.62M
Cash Flow
Free Cash Flow-13.97M-17.88M-7.07M-37.23M-32.95M-13.99M
Operating Cash Flow-12.07M-12.11M3.40M-8.77M-3.31M5.87M
Investing Cash Flow-1.61M-4.45M-2.60M-25.22M-38.81M-16.42M
Financing Cash Flow2.35M-536.00K8.61M38.03M5.72M52.66M

AXT Technical Analysis

Technical Analysis Sentiment
Positive
Last Price5.23
Price Trends
50DMA
3.41
Positive
100DMA
2.71
Positive
200DMA
2.23
Positive
Market Momentum
MACD
0.54
Negative
RSI
66.91
Neutral
STOCH
70.26
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 5.23 is above the 20-day moving average (MA) of 4.67, above the 50-day MA of 3.41, and above the 200-day MA of 2.23, indicating a bullish trend. The MACD of 0.54 indicates Negative momentum. The RSI at 66.91 is Neutral, neither overbought nor oversold. The STOCH value of 70.26 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 58 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

Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
77
Outperform
$323.61M22.2623.09%5.90%-9.22%-13.57%
68
Neutral
$249.78M151.052.76%-11.27%-9.20%
61
Neutral
$37.18B12.37-10.20%1.83%8.50%-7.62%
56
Neutral
$244.92M-12.56%-2.63%-78.66%
55
Neutral
$152.38M-100.22%-92.34%8.99%
54
Neutral
$304.39M-0.92%-6.09%97.33%
46
Neutral
$190.29M-24.56%8.70%-13.95%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
AXTI
AXT
5.23
2.57
96.62%
NVEC
NVE
70.41
-4.06
-5.45%
ATOM
Atomera
4.62
1.00
27.62%
MRAM
Everspin Technologies
11.50
5.17
81.67%
VLN
Valens
1.84
-0.22
-10.68%
XPER
Xperi Inc
6.70
-1.84
-21.55%

AXT Corporate Events

Business Operations and StrategyFinancial DisclosuresRegulatory Filings and Compliance
AXT Subsidiary Secures Export Permits in China
Positive
Aug 19, 2025

In August 2025, Beijing Tongmei Xtal Technology Co., Ltd., a subsidiary of AXT, Inc., received export permits from the Ministry of Commerce of China to resume shipping indium phosphide substrates to additional customers, following export control restrictions announced in February 2025. This development is expected to generate several million dollars in revenue not included in the company’s third-quarter forecast, potentially impacting the company’s financial performance positively.

The most recent analyst rating on (AXTI) stock is a Hold with a $2.00 price target. To see the full list of analyst forecasts on AXT stock, see the AXTI Stock Forecast page.

Executive/Board Changes
AXT Appoints Leonard J. Leblanc to Board
Neutral
Aug 4, 2025

AXT, Inc. recently appointed Leonard J. Leblanc to its Board of Directors, filling a vacancy left by the passing of Ms. Christine Russell. Mr. Leblanc, who has a rich history with the company and extensive experience in finance and corporate governance, will serve as a Class III director until July 2027. His familiarity with AXT’s operations and strategic needs is seen as crucial during this critical period. Additionally, Jesse Chen has been appointed as the Chair of the Audit Committee, bringing his expertise as an ‘audit committee financial expert’ to the role.

The most recent analyst rating on (AXTI) stock is a Buy with a $5.00 price target. To see the full list of analyst forecasts on AXT stock, see the AXTI Stock Forecast page.

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.Date of analysis: Oct 04, 2025