AXT's upside looks capped because its valuation already prices in a near-flawless indium phosphide capacity ramp. Doubling its ~25k wafers a year by end-2026 and again by end-2027 gives ~100k, about 4x, likely with some multiple compression. Even with ~58% growth to 2028, 60% gross-profit growth after and a 20x EV/GP multiple, EV reaches only ~$6.9B in five years versus $6.1B now. Only surprise capacity beyond 2027 changes the math; Soitec, at 19x EV/GP, is the better play. x.com  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 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

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'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'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'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 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's Q2 2026 results confirm its role as an upstream indium phosphide supplier to AI optical modules. Revenue rose 164% year on year to $47.6 million, well above $30.4-34.1 million consensus, with GAAP net income of $11.1 million and adjusted EPS of $0.19 versus $0.07 expected. Lumentum signed an InP substrate capacity reservation through 2031 with $87 million of prepayments. InP revenue hit a record and backlog topped $100 million as data-center links move to 800G and 1.6T. 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