AXT Stock Falls Despite 162% Revenue Jump on Indium Phosphide

What happened

AXT reported third-quarter non-GAAP earnings per share of $0.41 versus a $0.31 consensus, on revenue of $73.4 million versus a $66 million estimate. Revenue rose 162% from $28.0 million a year earlier. Despite this, AXT shares fell 9.99% as of 10:30 a.m. ET.

Confirmed

Global impact / market context

The falling share price despite strong results suggests investors expected even more or are reacting to other concerns. The diluted share count rose to 65.9 million from 43.8 million, meaning existing shareholders own a smaller slice of the company, which can weigh on per-share value.

Analyst inference

AXT makes indium phosphide substrates used in data center optical connections, tying its sales to demand for faster data infrastructure. Management says indium phosphide capacity more than doubled this year, which means more output is available to meet demand for these components.

Analyst inference

What to watch

1. AXT said it more than doubled its indium phosphide capacity this year and more than quadrupled its 2026 indium phosphide revenue opportunity through productivity gains and larger-diameter products. Confirmed
2. Watch whether AXT converts its expanded indium phosphide capacity into actual sales, since management describes a revenue opportunity rather than confirmed orders or contracted demand. Proposed
3. Watch the diluted share count, up to 65.9 million from 43.8 million, because further increases would spread future profit across more shares and reduce earnings per share. Analyst inference

Evidence

• gurufocus.com