On August 6, AXT Inc rose 8.24% in regular trading, trading at $74.37/share, with turnover of $183 million. The stock had previously declined 9.13% and 9.65% on consecutive days due to profit-taking following a single-day surge of over 42% on July 31, and rebounded 9.71% the prior session, with the current move extending the oversold recovery trend.

On the fundamental side, AXT Inc reported Q2 results on July 30 that significantly exceeded expectations, with revenue of $47.59 million far surpassing the consensus estimate of $34.09 million, and adjusted EPS of $0.19 beating estimates by 171%. Indium phosphide substrate revenue reached $30.70 million, a record quarterly high, driven primarily by data center applications. Management characterized the quarter as an inflection point in the business. Adjusted gross margin expanded to 45.0%, up from 8.2% a year ago.

On the capacity front, the company signed a 3-year primary supplier agreement with Coherent and a 6-year long-term agreement with Lumentum in late July, with indium phosphide backlog exceeding $100 million. Wedbush maintained its outperform rating, noting the AI-fueled opportunity remains in early innings.

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