On August 17, AXT Inc rose 6.28% in regular trading, trading at $88.17 per share, with turnover of approximately $80.99 million. The stock extended its recent rebound as the market continued to digest the Q2 earnings beat and persistent indium phosphide (InP) supply-demand tightness.

AXT reported Q2 adjusted EPS of $0.19, beating the consensus estimate of $0.07 by over 170%, while revenue surged 165% year-over-year to $47.6 million versus estimates of $34.1 million. InP substrate revenue reached a record $30.7 million in the quarter, with adjusted gross margin jumping from 8.2% a year ago to 45.0%. Management characterized the quarter as a business inflection point rather than a one-quarter step-up. Wedbush maintained its outperform rating, noting the company's leadership in IP, manufacturing capacity, and technical capability positions it to capitalize on the AI-fueled opportunity.

At the industry level, the global InP substrate supply-demand gap exceeds 70%, with AI data center connectivity requirements continuing to drive fundamental improvement expectations.

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