AXT Stock Rockets 15% as AI Chip Rally Returns, Lifting Indium Phosphide Supplier After Steep October Selloff

FREMONT, Calif. — Shares of AXT Inc. jumped more than 15% on Wednesday as investors piled back into artificial intelligence hardware stocks. The rally lifted the maker of specialty semiconductor substrates used in high-speed data center networking.

AXT rose $6.04, or 15.37%, to $45.35 in morning trading, giving the company a market value of about $2.94 billion. Volume reached about 3.9 million shares early in the session.

No company-specific announcement was immediately apparent. The move came as AI-related stocks rallied broadly after cloud provider CoreWeave reported strong third-quarter results and raised its outlook, easing fears of a slowdown in data center investment. Chipmakers, memory makers and AI infrastructure suppliers all moved higher.

AXT makes compound semiconductor wafers, including indium phosphide and gallium arsenide substrates. Indium phosphide is a key material in the optical components and lasers used to move data at high speeds inside AI data centers. That has made AXT a popular way for investors to bet on demand for AI networking equipment.

The company recently returned to profitability. For the third quarter, AXT reported sales of $73.41 million and net income of $25.72 million, compared with a loss a year earlier. For the first nine months of 2026, sales reached $147.92 million and net income $35.23 million. AXT has also signed a three-year wafer supply agreement with Coherent, a major maker of optical networking components.

The stock has been extremely volatile. Its shares are up about 258% over the past 52 weeks, climbing from a low of $8.44 to a high of $143.16. However, the stock fell sharply in October and early November, losing about 40% in a month as investors took profits and worried about AI spending. Shares fell about 22% on Nov. 5 alone during a broad tech selloff.

Wall Street is divided on the stock. According to MarketBeat data, analysts have an average rating of "hold" and a consensus price target of $77.80. In late October, B. Riley raised its price target to $56 from $55 while keeping a neutral rating. Needham upgraded the stock to buy with a $90 target in July.

Valuation remains a concern for some investors. Even after the recent decline, AXT trades at about 78 times earnings, according to market data. Some fair value models suggest the shares are priced well above their fundamental value. Critics say the stock is trading more on expectations of future AI demand than on current profits.

Supporters argue that demand for indium phosphide is rising rapidly as data centers upgrade to faster optical connections. They say AXT's move to profitability shows that higher sales are now translating into earnings.

AXT operates manufacturing facilities in China through subsidiaries, which exposes it to U.S.-China trade tensions and export controls on materials such as gallium and indium. Changes to those rules have caused sharp swings in the stock in the past.