Key Highlights

• AXT shares surged about 13.4% in Tuesday trading to $64.23, up from a prior close of $56.62.

• AXT's subsidiary AXT-Tongmei signed a three-year supply agreement with Coherent Corp including a $22.29 million prepayment.

• The deal follows a separate June agreement with Nanjing Casela worth $25.4 million for indium phosphide wafers.

• The stock carries a market capitalization of approximately $2.98 billion, with a 52-week range of $1.85 to $143.16.

Coherent Agreement Locks In Long-Term Demand

AXT, Inc. (NASDAQ:AXTI) shares surged in Tuesday trading after the company announced that its subsidiary AXT-Tongmei entered a three-year supply agreement with Coherent Corp covering compound semiconductor wafer substrates. The agreement includes a $22.29 million prepayment, providing AXT with locked-in long-term demand visibility for its indium phosphide, gallium arsenide and germanium substrate products.

AXT is a materials science company based in Fremont, California, that designs, manufactures and distributes high-performance compound and single-element semiconductor substrates using proprietary vertical gradient freeze technology. The company operates primarily through its Chinese subsidiary, which houses its manufacturing facilities in Beijing and benefits from a cost advantage in raw material sourcing, positioning AXT alongside Sumitomo Electric Industries in a global duopoly for certain substrate categories.

The Coherent agreement follows a separate supply agreement AXT signed in June with Nanjing Casela Technologies worth $25.4 million for indium phosphide wafers in 2027, reinforcing a broader narrative of growing demand for specialty compound semiconductors tied to artificial intelligence data center optical interconnects, 5G communications, LiDAR for autonomous vehicles, silicon photonics and satellite solar cells.

Analyst Coverage and Valuation Context

Northland Capital reiterated an Outperform rating on AXT shares last month alongside a $125 price target, citing the company's growing exposure to AI-driven demand for specialty compound semiconductors. Tuesday's gain builds on that bullish thesis, with investors framing the Coherent agreement as validation of sustained demand for AXT's wafer substrate products.

AXT shares traded at $64.23, up from a previous close of $56.62, with an intraday range between $60.44 and $68.38. The company's market capitalization stood near $2.98 billion, with earnings per share of negative $0.24. The stock has traded between $1.85 and $143.16 over the past 52 weeks, reflecting significant volatility tied to swings in sentiment around AI infrastructure spending.

The gain also followed a sharp decline earlier in the month, when AXT shares tumbled more than 12% amid a broader semiconductor selloff triggered by reports of a major AI company's move into cloud infrastructure, which had sparked concerns that AI companies could extract more value from existing hardware rather than driving new compound semiconductor demand.

Conclusion

AXT's sharp rally reflects renewed investor confidence in the durability of demand for its compound semiconductor substrates, reinforced by back-to-back multi-year supply agreements with Coherent and Nanjing Casela. Investors will likely continue watching the company's order backlog and capacity expansion plans at its Beijing manufacturing facility for further signals on long-term growth.

This article is for informational purposes only and does not constitute investment advice. Readers should conduct their own research before making financial decisions.