Skip to navigationSkip to main contentSkip to right columnADVERTISEMENTRicardo PillaiSun, June 7, 2026 at 6:48 PM GMT+2 3 min readIs AXTI a good stock to buy? We came across a bullish thesis on AXT, Inc. on Studio Innovation’s Substack by Studio. In this article, we will summarize the bulls’ thesis on AXTI. AXT, Inc.'s share was trading at $103.16 as of May 29th. AXTI’s forward P/E was 333.33 according to Yahoo Finance.Deutsche Bank Raises its Price Target on Marvell (MRVL)Photo by JESHOOTS.COM on UnsplashAXT, Inc. designs, develops, manufactures, and distributes compound and single element semiconductor substrates. AXTI is emerging as one of the strongest beneficiaries of the accelerating demand for optical connectivity infrastructure supporting AI and hyperscale data centers. The company delivered an exceptionally strong first quarter of 2026, with revenue increasing 39% year-over-year and 17% sequentially to $26.9 million, driven primarily by surging demand for indium phosphide substrates used in high-speed optical transceivers.Read More: 15 AI Stocks That Are Quietly Making Investors RichRead More: Undervalued AI Stock Poised For Massive Gains: 10000% Upside PotentialIndium phosphide revenue reached $13.6 million during the quarter, while non-GAAP gross margin improved dramatically to 29.9% from negative levels a year earlier, highlighting the operating leverage inherent in the business as volumes scale. The investment thesis is increasingly centered on AXT’s unique position within a rapidly expanding supply chain, where demand continues to outpace available capacity. Management reported that indium phosphide backlog exceeded $100 million for the first time in company history and expects the second quarter to set a new record for indium phosphide revenue.To capitalize on this opportunity, AXT recently raised $632.5 million to aggressively expand production capacity, targeting a doubling of output by the end of 2026, another doubling by the end of 2027, and further meaningful expansion thereafter. Demand from China more than doubled in the first quarter and is expected to double again in the second quarter, while the company is pursuing long-term supply agreements with major customers, hyperscalers, and end users.Management expects at least $34 million in second-quarter revenue with confidence and forecasts a return to both GAAP and non-GAAP profitability. With capacity expansion underway, growing customer commitments, six-inch product development progressing, and potential upside from export permit approvals, AXT appears positioned for sustained growth and continued rerating as one of the market’s standout AI infrastructure enablers.Previously, we covered a bullish thesis on Lam Research Corporation (LRCX) by The Antifragile Investor in May 2025, which highlighted the company’s indispensable role in semiconductor manufacturing, its recurring high-margin services business, and durable competitive advantages stemming from deep customer integration and high switching costs. LRCX's stock price has appreciated by approximately 284.32% since our coverage. Studio shares a similar view but emphasizes AXT, Inc.’s exposure to AI-driven optical networking demand, accelerating indium phosphide growth, and substantial capacity expansion opportunities.Terms and Privacy PolicyPrivacy & Cookie SettingsMore Info