AXT Inc. (AXTI) Soars 19.8% on Looming Indium Phosphide Price Hike

AXT Inc. (AXTI) Soars 19.8% on Looming Indium Phosphide Price Hike

Angelica Ballesteros

Mon, August 17, 2026 at 9:58 PM GMT+3 3 min read

• AXTI -14.23%

AXT Inc. (NASDAQ:AXTI) saw its share price jump by as much as 19.8 percent on Monday to $97.79 apiece—a two-month high— as investors snapped up shares following news that prices of indium phosphide (InP), which is used to make lasers for the artificial intelligence sector, could surge by 10 percent by the end of the year.

A report by financial services firm Nomura, citing two industry experts, said that prices of two-inch InP substrates have already jumped by as much as 76 percent to 880 yuan per wafer from 550 yuan in just the first six months of the year.

In the same period, prices of three-inch wafers climbed by 78 percent to 3,200 yuan from 1,800 yuan.

For illustration purposes only. Photo by Brett Sayles on Pexels

InP Prices to Jump 10% More in Q4

The surge was said to have been buoyed by the ongoing supply crunch in InP amid the rapidly growing artificial intelligence buildout.

A report by Taiwan-based Economic Daily News added that the industry was mulling over further hikes that could reach 10 percent in the fourth quarter of the year, sparking rosy growth prospects for industry players, including AXT Inc. (NASDAQ:AXTI).

An InP index—compiled by financial data provider Wind, and which covers 20 key players in China—climbed by 4.2 percent following the news.

AXTI to Benefit from Price Surge

Earlier this year, AXT Inc. (NASDAQ:AXTI) successfully bagged two new supply deals with optical and photonics manufacturers, Lumentum Holdings and Coherent Corp., after the InP producer highlighted in May that securing export permits has become a huge challenge for the company amid China's ongoing export restrictions. However, it later signaled progress in the second quarter of the year.

In June, Coherent agreed to prepay AXT Inc. (NASDAQ:AXTI) as much as $22.3 million to support an expansion of six-inch InP substrate capacity at the supplier's Beijing facility between 2026 and 2028.

Lumentum followed with an $87 million agreement reserving InP capacity for the next five years.

Analysts Say 'Buy'; Hedge Funds Hike Exposure

AXT Inc. (NASDAQ:AXTI) currently carries a strong buy rating from five Wall Street analysts, with Needham, Wedbush, Northland, and Craig-Hallum all assigning a buy recommendation, while B. Riley issued a more conservative hold call.

In terms of hedge fund sentiment, data from Insider Monkey showed that the number of institutional investors establishing exposure in the stock grew to 37 in the first quarter of the year from 34 in the fourth quarter of 2025.

More importantly, their convictions increased by 78 percent to $363.7 million from $204 million year-on-year.

While we acknowledge the potential of AXTI as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on thebest short-term AI stock.

READ NEXT: 33 Stocks That Should Double in 3 Years and Cathie Wood 2026 Portfolio: 10 Best Stocks to Buy.

Disclosure: None. Follow Insider Monkey on Google News.