AXT's permit-backed Q4 outlook weakens the near-term operating objection to the Sell case. Q3 revenue reached $73.4M at 56% GAAP gross margin; management guides to about $90M in Q4 from business permitted or not needing permits. InP contributed $54.3M and backlog exceeds $500M, though much spans years. The remaining test is whether 2027 capacity becomes qualified, permitted shipments at durable margins. x.com  x.com  x.com 

AXT's roughly $9B valuation can't be justified by its fundamentals. Even if revenue grows fivefold from $80M to $400M next year, EBIT would still be below $150M, which doesn't support an enterprise value of $9B or even $5B. Beyond short covering, it's hard to see anyone owning AXT at even half today's valuation, despite @aleabitoreddit's view that its indium phosphide substrates are a bottleneck whose contracts predate price hikes. x.com  x.com 

AXT's indium phosphide substrate chokepoint gives it pricing potential, though its Coherent agreement caps annual wafer-price increases. Channel checks suggest increases of 50-60% in Q2 2026, 10% in Q3 and over 10% in Q4. With supply agreements to Lumentum and Coherent, AXT probably becomes No. 1 ahead of Sumitomo Electric. A SanDisk-style hike now looks less likely because of the annual cap, whose percentage is redacted. x.com 

Applied Optoelectronics' possible 2028 revenue makes even a 100% takeover premium too small if it delivers on 2027-28 expectations. Revenue of $6-8B in calendar 2028 at an illustrative 8x multiple would imply about $56B in market value, versus $7B today. That is the upside worth holding out for. x.com 

AXT's bottleneck thesis does not hold, because AXT is not even the number-one player in its market. Sumitomo Electric can bring new capacity online within 18 months. x.com  x.com 

AXT is the upstream chokepoint of the photonics buildout, supplying the indium phosphide substrates every high-speed laser needs amid a massive global shortage. About 600,000-700,000 wafers shipped in 2025 against demand of 1.5-2 million, and AXT holds roughly 36% of a market three firms control. Record revenue rose 164% to $47.6M and gross margin hit 45% from 8.2%; Lumentum prepaid $87M to reserve capacity through 2031. The real risk is China, where slow export permits caused a guidance miss. … Show more

Small caps such as AXT that have risen 8,800% in a year at forward P/Es in the hundreds look held by buyers hoping to dump on the next person. Investors should ask who runs them, what the moats are and whether competitors can replicate them; Nvidia's Jensen Huang says most bottlenecks can be solved within a few years, so what happens in 5-10? This pushes back on @aleabitoreddit's claim that AXT controls the materials buildout for photonics. x.com 

AXT looks like a shell of Chinese companies at an absurd valuation: about 30x next year's sales and likely over 100x 2027 gross profit for a low-margin commodity business. Its manufacturing and most operations are in mainland China, while its US auditor has no China operations. The stock is up about 67% from last week's secondary pricing, and its only 5%+ holder has filed on just one other stock, a penny stock. x.com  x.com 

AXT is a speculative add on the market's sharp drop, because indium phosphide wafer prices have reportedly risen a lot lately. x.com 

AXT is absurdly valued at $8 billion, or 31x 2030 estimates, because the market is bidding up anything labeled a bottleneck. Such companies quickly turn from bottlenecks into over-earning commodity businesses, leaving holders with a bad bag. The guide shown from the last cycle puts quarterly revenue at just $26.9 million, and management was smart to have just raised $600 million. x.com  x.com  x.com  x.com