AXT Inc (NASDAQ:AXTI) Tumbles 5.07% as $87M Public Offering Sparks Dilution Concerns

AXT Inc (NASDAQ:AXTI) tumbled 5.0748% in pre-market trading on Dec. 30, 2025, as investors reacted to the company’s announcement of a $87 million public offering priced at $12.25 per share. The offering includes 7,098,492 shares of common stock, with an additional 30-day option for underwriters to purchase up to 1,064,773 more shares, potentially raising total gross proceeds to $100 million.

The capital raise is intended to fund manufacturing capacity expansion at AXT’s Beijing subsidiary for indium phosphide substrates, a critical material for semiconductor and optoelectronic applications. Proceeds will also support R&D initiatives and general corporate needs. Despite the company’s emphasis on growth opportunities, the stock decline reflects market concerns over potential shareholder dilution from the new issuance.

Northland Capital Markets led the offering, with Wedbush Securities and Craig-Hallum Capital Group serving as co-managers. The transaction is set to close on Dec. 30, 2025, subject to customary conditions. Analysts note the move underscores AXT’s strategic response to rising industry demand for compound semiconductor materials, though execution risks remain a key focus for investors.

With the offering priced below the current market value and a large number of shares to be issued, many observers are watching how the market digests the news over the next several trading sessions. The long-term performance of AXTI will hinge on how effectively the company utilizes the new capital and whether it can maintain its competitive edge in an increasingly crowded market.