AXT looks very bearish on the risk that China stops allowing indium phosphide exports to the US. The same export question raises doubt over whether US companies will even be able to use CXMT DRAM. x.com 

AXT's bull case hinges on supply rather than demand, and China holds many of the cards. Demand is growing strongly, but China can reasonably be expected to favor its own industry and permit exports only where they serve its broader interests, which argues against overly optimistic forecasts. @larmatrade notes over half of revenue is now domestic Chinese; if half of demand is Chinese, AXT should to some extent be valued like a Chinese company, and the market is likely to price it so over time. … Show more

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 cannot be the dominant indium phosphide substrate supplier when its customers' supply depends on the Chinese government's export permitting. Lumentum has locked up InP supply for several years with Sumitomo, a larger competitor that does not face the same export restrictions. Doubling down on manufacturing in China is an odd choice given continuous permitting roadblocks. Substrate pricing is unlikely to go parabolic, despite Serenity's claims of 10x+ price increases. x.com  x.com 

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 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 

AXT priced its secondary offering a steep 22.5% below the prior close, another sign the company is less legitimate than its choke-point story suggests. It follows the appointment of a CFO who had served a five-year officer ban. x.com 

AXT is a stock nobody should own because of its China risk, but it is not a long-term short. It sits at a major choke point with 40% market share in InP lasers, so unless China turns the lights off, the stock can still rally to higher extremes; gains from shorting it this week are worth taking. x.com 

AXT stays central to the InP substrate thesis because Coherent's 6-inch ramp relieves only its own device capacity and pushes the constraint upstream to substrates. Coherent does not plan to sell InP lasers externally soon, so the merchant shortage persists, which is also the context for Lumentum's long-term agreement with AXT. AXT's InP is made in Beijing, and China's InP export licensing remains despite the topic being raised in the Trump-Xi talks, so permission is the key variable. x.com  … Show more

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