NEW YORK — Shares of AXT rose more than 8% on Monday, rebounding from a steep sell-off late last week as investors returned to technology stocks tied to artificial intelligence.
AXT shares were up $4.33, or 8.43%, at $55.80 in morning trading on the Nasdaq. About 2.7 million shares changed hands. The company has a market value of about $3.6 billion.
The gain followed an 11% drop on Friday, when the stock closed at $51.47 amid a broad sell-off in AI-related shares.
No company news
AXT did not release any market-sensitive news on Monday. The rebound came as stock futures pointed higher following a volatile stretch for technology shares, with investors rotating back into beaten-down AI stocks.
AI-driven demand
Based in Fremont, California, AXT makes compound semiconductor substrates, including indium phosphide wafers, a key material used in high-speed optical components that connect servers in AI data centers.
Surging demand for indium phosphide has driven a dramatic rally in the company’s shares. AXT stock is up more than 900% over the past year, climbing from a 52-week low of about $4.35 to a high of $143.16.
The company has been rapidly expanding production capacity to meet demand, and it reported record results in the second quarter. AXT also strengthened its balance sheet this year, with cash and cash equivalents rising to about $412 million as of June 30, from about $120 million at the end of 2025.
Extreme volatility
The stock has been highly volatile, frequently moving 10% or more in a single session. It remains well below its peak after a series of declines in recent weeks.
AXT trades at a very high valuation relative to its current earnings, with a price-to-earnings ratio above 700, reflecting investor expectations of strong future growth.
Analysts have a consensus Hold rating on the stock, with price targets ranging from about $52 to $90, according to MarketBeat.
Insider selling
Director Leonard Leblanc sold 4,000 shares in August at an average price of about $96, according to regulatory filings.
AXT is scheduled to report third-quarter results on Oct. 29. Investors will focus on demand for indium phosphide substrates, progress on capacity expansion and the company’s outlook for AI-related orders.
