AXT (AXTI) AI Stock Analysis

• Market Cap: $1.22B
• Dividend Yield: N/A
• Average Volume (3M): 5.87M
• Price to Earnings (P/E): ―
• Beta (1Y): 2.71
• Revenue Growth: -4.54%
• EPS Growth: -119.39%
• Country: US
• Employees: 1,527
• Sector: Technology
• Sector Strength: 88
• Industry: Semiconductors
• EPS (TTM): -0.03
• Shares Outstanding: 55,274,160
• 10 Day Avg. Volume: 9,826,103
• 30 Day Avg. Volume: 5,871,122
• PEG Ratio: 0.23
• Price to Book (P/B): 0.49
• Price to Sales (P/S): 0.94
• P/FCF Ratio: -5.24
• Enterprise Value/Market Cap: 0.24
• Enterprise Value/Revenue: 3.25
• Enterprise Value/Gross Profit: 27.18
• Enterprise Value/Ebitda: -21.74
• 1Y Price Target: $16.20
• Price Target Upside: -26.70% Downside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 5
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 50 Neutral
• Price Target: $26.00 ▲(17.65% Upside)

The score is held back primarily by weak profitability and negative operating cash flow. Strong price trend and improving quarterly operating metrics (including higher margins and strong indium phosphide demand/backlog) support the score, but valuation remains challenged by ongoing losses and near-term risk is elevated due to export permit-driven shipment constraints and overbought technical conditions.

Positive Factors

Strong InP Demand & Backlog

A >$49M indium phosphide backlog provides multi-quarter revenue visibility tied to data center and optical transceiver buildouts. This supports production planning, justifies capacity investment, and underpins sustainable revenue growth as AI and high-speed networking demand persists.

Funded Capacity Expansion

The completed equity raise earmarked for doubling indium phosphide capacity in H2 2026 materially reduces funding risk for scale-up. Growing manufacturing capacity aligns supply with anticipated multi-year demand, improving unit economics and enabling durable revenue and margin expansion.

Improving Margins & Revenue Momentum

Sequential revenue growth and a jump to 22.4% non-GAAP gross margin indicate improving product mix and better volume absorption. If sustained, these trends point to operational leverage as capacity ramps, helping convert backlog into lasting profitability gains.

Negative Factors

Negative Operating Cash Flow

Persistent negative operating cash flow undermines the company's ability to self-fund growth and increases reliance on external equity or debt. Over months this can pressure liquidity, dilute shareholders if funded by equity, and limit agility in executing capacity expansion.

Export Permit Delays

Protracted export approvals create a structural execution risk for shipments and revenue timing, particularly for indium phosphide destined for global customers. Recurrent regulatory bottlenecks can disrupt customer fulfillment, slow backlog conversion, and complicate capacity planning.

Weak Profitability & ROE

A deeply negative net margin and negative ROE show the company is not generating returns on invested capital. Without sustained margin recovery and positive returns, growth investments risk being value-dilutive and may necessitate ongoing external financing.

AXT Business Overview & Revenue Model

Company Description

AXT, 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 Money

AXT generates revenue through the sale of its compound semiconductor substrates and related products to a diverse range of customers, including manufacturers in the telecommunications, electronics, and renewable energy sectors. Key revenue streams include direct sales of substrates, as well as custom products tailored to specific customer needs. The company benefits from long-term relationships with major clients in the optoelectronic and wireless communication markets, which provide stability and predictability to its revenue. Additionally, AXT's ongoing investments in research and development allow it to innovate and expand its product offerings, creating new revenue opportunities. Strategic partnerships with technology firms and academic institutions also enhance its market reach and contribute to its financial performance.

AXT Financial Statement Overview

Summary

AXT is facing significant financial challenges, particularly in profitability and cash flow management. Despite positive revenue growth, the company struggles with negative margins and returns. The balance sheet is relatively stable, but improvements in operational efficiency and profitability are crucial for long-term sustainability.

Income Statement

AXT's income statement reveals a challenging period with declining profitability. The TTM data shows a negative net profit margin of -25.22% and a gross profit margin of 11.97%, indicating pressure on profitability. Revenue growth is positive at 5.01% TTM, but the EBIT and EBITDA margins are negative, reflecting operational inefficiencies. The company needs to address these challenges to improve its financial health.

Balance Sheet

The balance sheet shows moderate leverage with a debt-to-equity ratio of 0.35 TTM, which is manageable. However, the return on equity is negative at -12.38% TTM, indicating that the company is not generating sufficient returns on shareholders' equity. The equity ratio is stable, suggesting a solid asset base, but the company needs to improve its profitability to enhance shareholder value.

Cash Flow

Cash flow analysis indicates a challenging situation with negative operating cash flow of -$15.8 million TTM. Free cash flow growth is positive at 35.55% TTM, but the operating cash flow to net income ratio is negative, highlighting cash flow issues. The free cash flow to net income ratio is above 1, suggesting some efficiency in converting net income to free cash flow, but overall cash flow management needs improvement.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	90.39M	99.36M	75.80M	141.12M	137.39M	95.36M
Gross Profit	10.82M	23.84M	13.32M	52.12M	47.41M	30.27M
EBITDA	-13.53M	-338.00K	-8.78M	30.12M	25.10M	11.63M
Net Income	-22.80M	-11.62M	-17.88M	15.81M	14.57M	3.24M
Balance Sheet
Total Assets	334.03M	339.31M	358.70M	370.07M	332.44M	298.86M
Cash, Cash Equivalents and Short-Term Investments	23.11M	22.83M	39.89M	44.29M	42.18M	72.84M
Total Debt	63.70M	49.78M	55.73M	48.88M	16.54M	13.23M
Total Liabilities	93.58M	84.41M	89.56M	80.33M	52.21M	43.33M
Stockholders Equity	179.15M	192.77M	203.99M	221.61M	211.53M	192.62M
Cash Flow
Free Cash Flow	-18.93M	-17.88M	-7.07M	-37.23M	-32.95M	-13.99M
Operating Cash Flow	-15.80M	-12.11M	3.40M	-8.77M	-3.31M	5.87M
Investing Cash Flow	-4.24M	-4.45M	-2.60M	-25.22M	-38.81M	-16.42M
Financing Cash Flow	6.71M	-536.00K	8.61M	38.03M	5.72M	52.66M

AXT Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 22.10
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: 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 22.1 is above the 20-day moving average (MA) of 17.67, above the 50-day MA of 13.72, and above the 200-day MA of 5.46, indicating a bullish trend. The MACD of 2.77 indicates Negative momentum. The RSI at 65.83 is Neutral, neither overbought nor oversold. The STOCH value of 62.76 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AXTI.

AXT Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NVEC	68 Neutral	$314.63M	22.76	22.20%	6.28%	-9.48%	-14.28%
MRAM	65 Neutral	$260.56M	-456.00	-0.91%	―	-0.41%	-134.49%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
VLN	58 Neutral	$213.94M	-7.23	-23.56%	―	7.53%	-15.00%
AXTI	50 Neutral	$1.22B	-41.92	-12.00%	―	-4.54%	-119.39%
XPER	49 Neutral	$282.65M	40.48	1.74%	―	-10.74%	―
ATOM	46 Neutral	$75.08M	-3.51	-116.86%	―	-94.26%	3.20%

AXT Corporate Events

AXT Cuts Q4 Outlook Amid Export Permit Constraints

On January 8, 2026, AXT updated its revenue expectations for the fourth quarter of 2025, projecting sales of $22.5 million to $23.5 million, a reduction primarily attributed to fewer-than-anticipated export control permits for indium phosphide issued by China’s Ministry of Commerce, which constrained shipments in December despite strong customer demand. Management highlighted that the company remains in the early stages of a multi-year growth cycle driven by AI-related infrastructure and high-speed optical connectivity, is on track to more than double indium phosphide capacity in the second half of 2026, and intends to deploy proceeds from a December capital raise to expand manufacturing capacity for anticipated data center growth; AXT also scheduled its fourth-quarter 2025 earnings release and call for February 19, 2026 and confirmed its participation in the 28th Annual Needham Growth Conference in New York on January 14, 2026.

The most recent analyst rating on (AXTI) stock is a Hold with a $18.00 price target. To see the full list of analyst forecasts on AXT stock, see the AXTI Stock Forecast page.

AXT completes enlarged public equity offering for expansion

On December 29, 2025, AXT, Inc. entered into an underwriting agreement for a public offering of 7,098,492 shares of common stock at $12.25 per share, targeting gross proceeds of about $87 million, with a 30-day option granted to underwriters for an additional 1,064,773 shares that could lift total gross proceeds to roughly $100 million; the deal, led by Northland Securities with Wedbush Securities and Craig-Hallum as co-managers, was expected to close on or about December 30, 2025, and included customary representations, closing conditions and a 60-day lock-up commitment from AXT’s executives and directors. On the same day, the underwriters fully exercised the over-allotment option, securing an additional $13.0 million in anticipated gross proceeds and positioning AXT to direct the net funds toward expanding indium phosphide substrate manufacturing capacity at its Beijing Tongmei subsidiary for global export, supporting research and development, and strengthening working capital and general corporate resources, potentially enhancing its ability to meet growing demand in advanced compound semiconductor markets.

The most recent analyst rating on (AXTI) stock is a Buy with a $20.00 price target. To see the full list of analyst forecasts on AXT stock, see the AXTI Stock Forecast page.