AXTI plunges 5.07% as 87M public offering sparks dilution concerns

AXT Inc (NASDAQ:AXTI) tumbled 5.0748% in pre-market trading on Dec. 30, 2025, following the announcement of an $87 million public offering of 7.1 million shares, with an additional 1.1 million shares available through a 30-day underwriter option. The issuance aims to fund capacity expansion for indium phosphide substrates at the company’s Beijing facility, a key material for semiconductor and optoelectronic applications, while also supporting R&D and corporate needs.

Investors appeared concerned over potential shareholder dilution, as the offering price of $12.25 per share was set below the stock’s recent market value. Northland Capital Markets led the deal, with Wedbush Securities and Craig-Hallum Capital Group as co-managers. The transaction is expected to close by year-end, contingent on standard conditions.

Analysts highlighted the strategic importance of addressing growing demand for compound semiconductor materials but emphasized execution risks as a critical factor. The market’s reaction will likely hinge on how the company deploys the capital and maintains competitiveness in an increasingly crowded sector over the coming months.

Investors and market observers are also monitoring the broader market environment, particularly how sector-specific trends in semiconductor equipment and materials may affect AXTI’s performance in the near term. Analyst reports suggest a cautiously optimistic outlook, contingent on clear capital allocation and R&D progress.