AXT's AI optical supply chain role drives 164% revenue jump and strong margins in Q2

AXT reported a 164% year-over-year revenue increase to $47.6 million in Q2, with gross margins reaching 44.9%, highlighting its critical position in the AI optical supply chain. High barriers and limited suppliers make its Indium Phosphide (InP) capacity valuable, attracting upfront capital commitments from major customers like Coherent and Lumentum. The company aims to grow quarterly InP revenue capacity to $60 million by 2026 and $130 million by 2027 through manufacturing efficiencies. While growth prospects are strong, competition, export restrictions, and execution risks remain challenges.

AXTI shares have seen a significant 11.12% drop in one day, trading at USD 51.47 on Pluang as of Oct 17, 2026 20:02 WIB. Despite the recent decline, the stock maintains a market cap of $3.37 billion with a strong buyer interest at 75% of order activity.