AXT Inc. (NASDAQ: AXTI) shares surged 8.29% following completion of $100 million public offering to expand InP production.

AXT Inc. (NASDAQ: AXTI) shares surged 8.29% in pre-market trading on December 31, 2025, signaling investor optimism ahead of the new year.

The rally followed the company’s completion of a $100 million public offering to expand production of indium phosphide (InP) substrates at its Beijing subsidiary. Proceeds will directly address surging demand for InP wafers in 5G infrastructure, data center silicon photonics, and AI-driven technologies, positioning AXT to scale manufacturing capacity and reduce supply bottlenecks.

While initial pre-market declines reflected dilution concerns from the 8.16 million-share offering—including full exercise of the underwriters’ over-allotment option—investors ultimately prioritized long-term growth potential. Northland Capital Markets led the transaction, with Wedbush and Craig-Hallum as co-managers, underscoring institutional confidence in AXT’s strategic expansion. The capital infusion also supports R&D initiatives and operational flexibility amid tightening industry demand for high-performance semiconductor materials.

Industry analysts have noted the broader trend of surging demand for high-purity semiconductor materials, driven by AI infrastructure and next-gen telecommunications. AXTI’s strategic focus on InP substrates, a critical component in photonic and high-speed electronic devices, aligns with long-term sector tailwinds. These substrates enable faster data transmission and improved energy efficiency, making them integral to modern 5G and AI applications.

With the capital raised, AXT plans to significantly boost wafer production while refining its supply chain logistics to meet global demand. The company's expansion is also expected to strengthen its competitive position against international peers, particularly in Asia-Pacific markets where 5G and AI adoption is accelerating at a rapid pace.