AXT in focus as Wedbush likens management to Jaws hero after strong results

What happened

AXT reported third-quarter adjusted earnings of $0.41 per share and revenue of $73.41 million, up 162.2% from a year earlier, beating analyst estimates. The indium phosphide maker guided fourth-quarter revenue to about $90 million, above the consensus of $76.8 million, while its backlog rose above $500 million.

Confirmed

Global impact / market context

A backlog above $500 million means orders already placed by customers, far above the prior quarter's level, suggesting demand is outrunning supply. Wedbush sees AXT as a clean way to invest in the AI optical buildout, which means spending on parts used in AI data centers, and expects profit per sale to keep improving.

Analyst inference

The strong results and guidance contrast with the stock falling 7.5% before the market opened, alongside a broader technology selloff. That gap suggests company-specific good news was outweighed by market-wide selling pressure, which can affect how investors position in AI-related suppliers even when results beat expectations.

Analyst inference

What to watch

1. AXT plans to roughly double indium phosphide production capacity in 2027, after nearly tripling it this year, while every customer is currently on allocation, meaning orders are limited by available supply. Confirmed
2. Wedbush analyst Matt Bryson rates AXT Outperform with a $93 price target, arguing the company is one of the cleanest ways to gain exposure to the AI optical buildout as demand outruns supply. Proposed
3. Watch whether fourth-quarter revenue near $90 million and adjusted earnings of $0.57 to $0.59 per share materialize, and whether rising backlog converts to sales and stronger profit per sale as capacity expands. Analyst inference

Evidence

• seekingalpha.com