AXT: A Small-Cap Semiconductor Play Outpacing GLBE in 2026

The global economy is increasingly shaped by the race to overcome AI infrastructure bottlenecks. In this context, AXT Inc., a small-cap semiconductor materials supplier, has emerged as a standout performer, leveraging its dominance in indium phosphide (InP) wafers to outpace even high-growth e-commerce players like Global-E Online (GLBE). While GLBE grapples with a bloated valuation and a fiercely competitive market, AXT's strategic position in a critical AI materials niche-coupled with explosive revenue growth and a clear path to scaling-positions it as a compelling long-term investment.

AXT's Leadership in a High-Growth Niche

AXT's 40% share of the global InP market is not merely a statistic; it is a testament to the company's technological leadership in a material indispensable to next-generation AI infrastructure. In Q3 2025, the firm reported a staggering 250% sequential revenue increase in its InP segment, driven by surging demand for high-speed optical connectivity in data centers. This growth is underpinned by the fact that InP wafers are central to photonic integrated circuits (PICs), which address AI's most pressing bottlenecks-energy efficiency, computational capacity, and the "memory wall" problem.

The company's forward-looking strategy is equally compelling. AXT plans to more than double its InP production capacity in the second half of 2026, a move designed to meet the anticipated surge in demand. The AI Computing Power InP market, projected to grow from $512 million in 2025 to $1.023 billion by 2032, offers a multi-year runway for AXT's expansion. This is not speculative hype but a structural shift driven by the physical limits of silicon-based computing and the urgent need for optical solutions in AI workloads.

Addressing AI Infrastructure Bottlenecks

The technical case for InP is robust. Photonic artificial intelligence chips (PAICs), which rely on InP-based components like Mach–Zehnder interferometers and micro-ring resonators, enable optical neural networks that process data in parallel with minimal latency. Unlike traditional electronic interconnects, these systems eliminate the need for repeated data movement between memory and processing units, drastically reducing energy consumption. Furthermore, silicon photonics platforms, which integrate III-V quantum wells with silicon waveguides, are lowering manufacturing costs and enhancing scalability. AXT's expertise in these technologies places it at the forefront of a transition that could redefine AI hardware for decades.

Contrasting GLBE's E-Commerce Challenges

While AXT is capitalizing on a structural inflection point, GLBE's trajectory is more precarious. The e-commerce platform, despite achieving profitability with $7.33 million in net income and $888.45 million in annual revenue, faces a P/E ratio of 946-a valuation that seems disconnected from its fundamentals. Even its forward P/E of 39.4 reflects a market that is betting on aggressive growth, yet GLBE operates in a sector saturated with giants like Amazon and Walmart.

GLBE's reliance on cross-border e-commerce, while a strategic advantage, exposes it to geopolitical risks such as tariffs and compliance uncertainties. Its AI-driven initiatives-such as the ReturnGo acquisition and post-purchase automation-are commendable but pale in significance compared to the foundational role of InP in AI infrastructure. The e-commerce sector's focus on incremental improvements in logistics and customer experience lacks the transformative potential of photonic computing.

Valuation and Risk Considerations

AXT's current valuation appears far more rational. With a robust order backlog exceeding $49 million and gross margins improving from 8.2% to 22.4% in Q3 2025, the company is demonstrating operational discipline. Its challenges-such as export permit delays from China-are temporary and do not detract from its long-term prospects. In contrast, GLBE's high P/E ratio, even if justified by future growth, carries significant downside risk if market conditions deteriorate or if competitors erode its margins.

Conclusion

The divergence between AXT and GLBE in 2026 is emblematic of a broader shift in the global economy: the transition from digital commerce to physical computing. AXT's leadership in InP-a material critical to overcoming AI's infrastructure bottlenecks-positions it to benefit from a multi-decade growth trend. GLBE, while a competent player in e-commerce, operates in a sector where differentiation and scalability are increasingly difficult to achieve. For investors seeking exposure to the next phase of technological innovation, AXT offers a compelling case of a small-cap company with outsized potential.