AXT bStock Falls 16% as AXTI Reverses Friday’s Sharp Rally

AXT bStock fell sharply on Monday as the underlying Nasdaq-listed shares reversed part of their recent rally.

In a Binance market snapshot reviewed by The Crypto Basic, AXT bStock (AXTIB) was trading at $78.91, down 16.24% over 24 hours. The token had traded between $77.75 and $94.44, generating approximately $848,015 in daily volume.

AXT Inc. shares were quoted at approximately $78.58 at the same time, representing an intraday decline of about 11.3%. AXTI had closed Friday at $88.58.

A review of AXT’s investor-relations announcements and SEC filings found no new earnings report, material regulatory filing or company announcement preceding Monday’s decline. The available evidence therefore does not support attributing the selloff to a new company-specific event.

Instead, the price action shows AXTI surrendering part of an exceptionally large short-term gain. Investors also continue to assess previously disclosed risks involving Chinese export permits, AXT’s dependence on China-based manufacturing and the substantial increase in its share count following two public offerings.

AXT Stock Reverses Friday’s 17.84% Gain

Monday’s decline followed a 17.84% surge on Friday, when AXTI rose from $75.17 to $88.58.

The stock had advanced for three consecutive sessions and gained approximately 87.6% during the preceding two weeks. On Friday alone, AXTI traded between $78.50 and $89.48.

AXTI initially moved above Friday’s closing price on Monday before reversing and falling back toward the lower end of Friday’s trading range, according to market data for AXT shares.

This sequence confirms that Monday’s move erased part of the preceding rally. However, without a new corporate disclosure, the reason individual investors sold cannot be established definitively.

Despite the daily decline, Binance data showed AXTIB remaining 26.60% higher over seven days.

China’s Export-Permit System Remains AXT’s Main Operational Risk

AXT develops compound-semiconductor substrates made from indium phosphide, gallium arsenide and germanium. These materials are used in data-center connectivity, optical networking, telecommunications, lasers, sensors and other semiconductor applications.

Although AXT is headquartered in Fremont, California, its manufacturing facilities are located in China. The company has disclosed that its three wafer-substrate product families manufactured there require permits before they can be exported.

China added indium phosphide substrates to its export-control list on February 4, 2025. AXT began applying for permits after the application system opened the following month and received its first approvals in June 2025.

AXT has repeatedly identified the timing of these permits as a significant constraint on its international shipments.

In January, the company lowered its expected fourth-quarter 2025 revenue to between $22.5 million and $23.5 million because China’s Ministry of Commerce had issued fewer indium-phosphide export permits than anticipated. AXT ultimately reported quarterly revenue of $23 million.

Permit approvals improved during the first half of 2026, allowing the company to ship more products internationally. However, AXT stated in its first-quarter regulatory filing that it could not predict when individual applications would be reviewed and approved.

China accounted for approximately 70% of global indium production in 2024. The country has also subjected some indium-metal shipments to additional end-user checks and longer approval processes.

These are documented operational risks for AXT. However, the company did not disclose a new permit rejection or export restriction before Monday’s decline.

AXT Issued Approximately 18 Million New Shares

Share dilution is another established factor affecting AXTI’s ownership structure and per-share valuation.

In December 2025, AXT completed an offering of 8,163,265 common shares at $12.25 each. The total included the underwriters’ full option exercise and generated approximately $100 million in gross proceeds.

AXT returned to the equity market in April 2026 with a substantially larger offering.

The company initially sold 8,560,311 shares at $64.25 each, raising $550 million before underwriting costs and other expenses. Underwriters subsequently exercised their option to purchase another 1,284,046 shares at the same public offering price.

The additional purchase increased the April offering to 9,844,357 shares and raised total gross proceeds to approximately $632.5 million. Combined, the December and April transactions introduced 18,007,622 additional shares.

AXT said the April proceeds would primarily support the expansion of indium-phosphide production capacity at its Beijing Tongmei subsidiary. The company also identified research, product development, working capital and general corporate purposes as intended uses of the funds.

The April offering affected AXTI when it was announced and priced below the prevailing market price. However, it was completed months before Monday’s decline. It remains relevant to AXT’s outstanding share count and valuation but was not a new catalyst for the latest selloff.

Second-Quarter Results Improved Considerably

AXT’s latest financial results do not provide a negative explanation for Monday’s decline.

Second-quarter revenue reached $47.6 million, compared with $26.9 million in the preceding quarter and $18 million one year earlier.

GAAP gross margin increased to 44.9%, up from 29.6% in the first quarter and 8% in the corresponding 2025 period.

AXT also returned to profitability:

• GAAP net income reached $11.1 million, or $0.17 per diluted share.
• Non-GAAP net income totaled $11.9 million, or $0.19 per diluted share.
• The company had reported a $7 million GAAP net loss one year earlier.

Management said AXT’s order backlog exceeded $100 million. The company also identified approximately $66 million of potential third-quarter revenue from orders for which export permits had already been received or were not required.

The second-quarter report was released on July 30, more than a week before Monday’s trading session, and therefore was not a new development behind the decline.

What AXT’s $87 Million Lumentum Agreement Represents

AXT also recently entered a long-term agreement to supply indium-phosphide wafer substrates to Lumentum.

Under the agreement, AXT will reserve production capacity for Lumentum through December 31, 2031. Lumentum agreed to provide two deposits totaling $87 million:

• An initial deposit of $43.5 million, due within 30 business days of the agreement.
• A second $43.5 million deposit whose timing and payment terms will be determined during 2028.

The deposits should not be treated as $87 million of immediate revenue. AXT stated that the funds will be applied as credits against future product shipments until the deposits are exhausted.

The Lumentum agreement supports the existence of long-term customer demand for AXT’s indium-phosphide products. However, it does not remove the export-permit requirements affecting shipments from China.

Why AXTIB Fell More Than AXTI

AXTIB’s displayed 16.24% decline was larger than AXTI’s approximately 11.3% intraday loss because the two percentages covered different measurement periods.

The Nasdaq percentage measured AXTI’s move from Friday’s official closing price. Binance’s percentage measured AXTIB’s performance over a rolling 24-hour period, including trading outside regular US market hours.

The actual prices remained closely aligned. AXTIB traded at $78.91 while the underlying AXTI price displayed by Binance was $78.577. That placed the token approximately 0.42% above the stock at that moment.

Binance states that bStocks are tokenized certificates issued by BTech Holdings Limited and backed one-to-one by corresponding US shares held through a regulated custodian.

AXTIB therefore provides economic exposure to AXT shares, but it does not give holders direct ownership of AXTI stock or conventional shareholder rights. Its round-the-clock trading also means the token can react while Nasdaq is closed.

What Can Be Confirmed About AXT’s Decline

No verified new AXT announcement preceded Monday’s selloff. The clearest description of the move is that AXTI and AXTIB reversed part of a powerful short-term rally after the underlying stock gained 17.84% on Friday and approximately 87.6% over the preceding two weeks.

The principal company-specific risks already documented by AXT include:

• Dependence on Chinese export permits for international shipments.
• Manufacturing operations concentrated in China.
• Backlogged orders that remain subject to permit approvals.
• Approximately 18 million shares issued through two public offerings since December 2025.
• Extreme volatility following AXTI’s extraordinary appreciation.

These factors remain important when assessing AXT’s valuation and risk profile. However, none was newly announced on Monday, meaning it would be inaccurate to present any single factor as the confirmed cause of the session’s decline.

AXT’s underlying business entered the selloff with improving revenue, margins, profitability and order demand. Monday’s drop therefore represents a sharp market reversal rather than a verified response to deteriorating second-quarter results or a newly disclosed operational setback.