AXT Inc. shares plunge 5.07% in pre-market trading as public offering sparks dilution concerns

AXT Inc. (NASDAQ:AXTI) shares fell 5.0748% in pre-market trading on December 30, 2025, amid investor concerns over a newly announced public offering. The stock’s decline reflects market skepticism about potential equity dilution following the company’s capital-raising plans.

The company priced a $87 million public offering of 7.098 million common shares at $12.25 apiece, with underwriters granted a 30-day option to purchase an additional 1.065 million shares. Proceeds will primarily fund capacity expansion at its Beijing-based subsidiary, Beijing Tongmei Xtal Technology, to meet rising demand for indium phosphide substrates, as well as R&D and corporate needs. Northland Capital Markets led the offering, with Wedbush and Craig-Hallum serving as co-managers.

Analysts suggest the sharp pre-market drop signals investor wariness over the dilutive impact of the new shares, despite AXT’s emphasis on strategic growth initiatives. The offering is set to close by year-end, subject to standard conditions, and underscores the company’s focus on scaling production for compound semiconductor materials used in 5G, data centers, and optoelectronics.