AXT Inc (AXTI) surged 5.53% in intraday trading on Friday, extending its recovery momentum as investors continued to digest the company's blowout second-quarter earnings report released on July 30.

The rally has been fueled by quarterly results that massively exceeded Wall Street expectations, with revenue reaching $47.59 million—well above the consensus estimate of $34.09 million—and adjusted earnings per share of $0.19 beating forecasts by 171%. A standout metric was indium-phosphide substrate revenue, which hit a record $30.70 million in a single quarter, driven primarily by data center applications tied to the artificial-intelligence boom. Management described the period as a business inflection point, underpinned by long-term supply agreements, including a three-year deal with Coherent and a six-year commitment from Lumentum that pushed the company's InP backlog above $100 million.

The broader optical communications and semiconductor equipment sectors also traded higher during the session, with peers such as Onto Innovation, KLA Corporation, and ASML posting strong gains, reflecting sustained investor enthusiasm for companies positioned at critical chokepoints in the AI supply chain.