Key insights
- AXT Inc. plans a public stock offering to fund capacity expansion for its Beijing Tongmei subsidiary, focusing on indium phosphide substrates. Despite a significant stock surge, the company remains unprofitable with a low gross margin and is considered overvalued. The offering's success is subject to market conditions, creating uncertainty and potentially diluting existing shareholders, which could exert slight downward pressure on the broader semiconductor sector.
FREMONT, Calif. - AXT Inc. (NASDAQ:AXTI) announced today it intends to offer shares of common stock in a public offering, according to a press release statement. The timing comes as shares trade near their 52-week high of $83.25, following a remarkable 6,838% return over the past year.
The compound semiconductor wafer substrate manufacturer filed an effective shelf registration statement on Form S-3ASR with the Securities and Exchange Commission today. The company plans to grant underwriters a 30-day option to purchase up to an additional 15% of the shares offered at the public offering price, less underwriting discounts.
AXT stated it intends to use net proceeds primarily to support its subsidiary Beijing Tongmei Xtal Technology Co., Ltd. in increasing capacity to produce indium phosphide substrates for export worldwide. Additional funds will be allocated to research and development of new or improved products, working capital and general corporate purposes. The capital raise comes as the company posted a gross profit margin of just 12.73% in the last twelve months and remains unprofitable with negative earnings per share of $0.49, according to InvestingPro data. InvestingPro analysis indicates the stock is currently overvalued relative to its Fair Value—one of 18+ exclusive ProTips available to subscribers.
The offering is subject to market and other conditions. The company noted there is no assurance as to whether or when the offering may be completed, or the actual size or terms.
Northland Capital Markets is serving as sole bookrunner for the offering. Needham & Company, B. Riley Securities Inc., Craig-Hallum Capital Group LLC and Wedbush Securities Inc. are acting as co-managers.
AXT manufactures high-performance compound and single element semiconductor substrate wafers including indium phosphide, gallium arsenide and germanium. The company’s products are used in applications where silicon substrates cannot meet performance requirements. End markets include 5G infrastructure, data center connectivity, passive optical networks, LED lighting, lasers, sensors, power amplifiers for wireless devices and satellite solar cells.
The company maintains its worldwide headquarters in Fremont, California, with Asia headquarters in Beijing and manufacturing facilities in three locations in China.
In other recent news, AXT, Inc. announced plans for a public offering of common stock. The company intends to offer and sell shares, with underwriters having a 30-day option to purchase an additional 15% of the shares at the public offering price, subject to market and other conditions. There is no assurance regarding the completion, size, or final terms of this offering. Meanwhile, Needham upgraded Nova Measuring Instruments’ stock rating from Hold to Buy, setting a price target of $500.00. This upgrade was based on Nova’s strong global execution and its potential to benefit from China’s memory wafer fabrication equipment upside in 2026. Additionally, Needham upgraded Ichor Holdings’ stock rating from Hold to Buy, with a price target of $36.00. The firm highlighted Ichor’s potential as a derivative play to larger semiconductor equipment manufacturers like Lam Research and Applied Materials. These are the latest developments concerning these companies.
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