AXT Inc (AXTI) Soars 18.43% on Regulatory Progress in 5G Materials Export Permits

AXT, Inc. (AXTI) surged 18.43% on Monday, marking its third consecutive day of gains with a 30.46% rise over the past three days. The stock hit an intraday high of 20.28% and reached its highest level since September 2025, driven by recent regulatory progress and renewed institutional interest. The rally reflects optimism around the company’s ability to navigate supply chain constraints and stabilize its revenue streams.

A critical development fueling the stock’s ascent is the approval of export permits for gallium arsenide and germanium substrates by China’s Ministry of Commerce. These materials are pivotal for 5G infrastructure and fiber optics, sectors where AXT holds a specialized market position. The permits, announced in late September, address prior delays that had pressured Q2 and Q3 earnings. While the authorization is limited to specific substrates, it signals progress in resolving regulatory bottlenecks that had disrupted supply chains and reduced demand for AXT’s wafers.

Financial performance in 2024 and 2025 has been mixed, with revenue rising to $99.36 million in 2024 but net losses persisting due to operational inefficiencies and regulatory costs. Recent analyst ratings reflect cautious optimism, with a "Strong Buy" maintained at $4.60 per share, though more recent assessments have shifted to "Moderate Buy." Institutional investors have also shown confidence, with firms increasing holdings in AXT, including a $1.13 million stake by Foundry Partners LLC. Such activity underscores support for the stock amid volatility but highlights the need for consistent performance to justify valuation expectations.

Geopolitical risks remain a key overhang, as AXT’s reliance on Chinese manufacturing exposes it to trade tensions and export controls. New regulations in China on semiconductor materials have created uncertainty for supply chain stability. However, the recent permit approvals suggest a potential easing of restrictions, which could stabilize revenue and restore investor confidence. Analysts emphasize that AXT’s long-term prospects are tied to its role in high-growth areas like silicon photonics and autonomous vehicle lidar systems, though near-term challenges persist.

The stock’s recovery trajectory hinges on its ability to balance regulatory compliance with operational resilience. With export flexibility improving and institutional backing growing, AXT’s market position in critical semiconductor substrates positions it to benefit from expanding demand in AI and 5G. Investors are advised to monitor quarterly earnings and regulatory updates as key indicators of the company’s ability to sustain its recent momentum.