NASDAQ: AXTI Surges 8.29% Driven by $100M Public Offering for InP Production Expansion in Beijing

AXT Inc. (NASDAQ: AXTI) shares surged 8.29% in pre-market trading on December 31, 2025, following the completion of a $100 million public offering to expand indium phosphide (InP) substrate production at its Beijing subsidiary. The rally reflects investor confidence in the company’s strategic move to address surging demand for advanced semiconductor materials in 5G infrastructure, data centers, and AI applications.

The capital raise, led by Northland Capital Markets with co-managers Wedbush and Craig-Hallum, included the full exercise of the underwriters’ over-allotment option. Proceeds will prioritize scaling manufacturing capacity at Beijing Tongmei Xtal Technology, enhancing R&D for next-generation substrates, and strengthening working capital. The expansion aims to alleviate supply constraints and position AXT to meet global demand for InP wafers, critical components in high-speed photonic and electronic devices.

Analysts highlight the alignment of AXT’s strategy with long-term industry trends, particularly the growing reliance on InP substrates for energy-efficient 5G networks and silicon photonics. While initial pre-market volatility reflected dilution concerns from the 8.16 million-share offering, the stock ultimately gained traction as investors prioritized the company’s growth potential. The move underscores AXT’s focus on capturing market share in a sector driven by AI infrastructure and telecommunications advancements.

The strategic expansion and capital raise are expected to drive long-term value creation, supported by favorable industry dynamics and increased production capacity. With demand for InP substrates projected to grow at a compound annual rate of 12%, AXT is well-positioned to benefit from the ongoing digital transformation across multiple end markets.

Investors remain cautiously optimistic, with many viewing AXTI as a speculative play on the semiconductor materials sector. However, the recent financing move has helped stabilize short-term concerns and reinforce the company’s commitment to innovation and scalability in a high-growth niche.