AXT Inc. (NASDAQ: AXTI) surges 8.29% pre-market on $100 million public offering to expand indium phosphide production.

AXT, Inc. (NASDAQ: AXTI) surged 8.29% in pre-market trading on December 31, 2025, following the announcement of a $100 million public offering to expand its indium phosphide production capacity. The stock’s sharp rise reflected investor optimism over the company’s strategic move to address growing demand in semiconductor applications.

The newly raised capital, secured through an underwritten offering of 8.16 million shares at $12.25 each, will primarily fund capacity expansion at AXT’s Beijing subsidiary. This initiative aims to boost the production of indium phosphide substrates, critical components for 5G infrastructure, data center connectivity, and advanced optoelectronic devices. The offering included full exercise of the underwriters’ over-allotment option, signaling institutional confidence in AXT’s growth trajectory.

Analysts highlighted the strategic alignment with long-term industry trends, particularly in silicon photonics and high-performance computing. By scaling manufacturing capabilities in China, AXT seeks to reduce lead times and strengthen its position in markets requiring specialized semiconductor materials. While the capital raise initially sparked pre-market volatility due to dilution concerns, the stock ultimately gained momentum as investors focused on the expansion’s potential to drive revenue growth in high-margin sectors.

With the expansion expected to come online in early 2026, AXT aims to increase its production capacity by 40% by the end of the year. The company has also committed to reinvesting part of the proceeds into R&D initiatives for next-generation optoelectronic materials, positioning itself for a broader market share in the $30 billion semiconductor materials sector.

Looking ahead, AXT’s stock is being closely watched by both long-term investors and short-term traders, with technical indicators suggesting a potential breakout above key resistance levels in early trading sessions of 2026. The company’s recent performance has also reinvigorated its standing within the semiconductor materials sub-sector, with several analysts revising their ratings to "outperform."