AXT (AXTI) heads into its second quarter 2026 earnings report on July 30, with investor attention centered on AI related demand, a record indium phosphide backlog and recent manufacturing expansion.

AXT’s share price has pulled back sharply in recent weeks, with a 1 day share price return of down 10.69% and a 30 day share price return of down 39.04%. However, the year to date share price return of 155.13% and a very large 1 year total shareholder return suggest momentum has been strong over a longer stretch, especially as investors weigh AI related demand, the coming earnings report and the recent appointment of Jia Bin Duh to the board.

If you are watching how AI related hardware suppliers are trading around earnings, it could be a good time to scan a wider field of opportunities through the 56 AI infrastructure stocks

After AXT’s sharp pullback, but very strong year to date gain, investors are weighing whether the recent optimism around AI, capacity expansion and governance changes is already reflected in the price, or if the risk reward still leans toward buyers.

Most Popular Narrative: 55.7% Undervalued

Analysts following AXT see a fair value of $96.50 per share, well above the last close of $42.76. That gap rests on an aggressive long term earnings blueprint tied to AI related demand and margin recovery assumptions.

The analysts have a consensus price target of $96.5 for AXT based on their expectations of its future earnings growth, profit margins and other risk factors.

However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $125.0, and the most bearish reporting a price target of just $73.0.

Want to see what sits behind that wide range of outcomes for AXT? The narrative leans heavily on rapid revenue expansion, sharp margin repair, and a richer future earnings multiple that many investors may find surprisingly ambitious.

Result: Fair Value of $96.50 (UNDERVALUED)

However, AXT’s heavy exposure to Chinese customers and ongoing export permit uncertainty could quickly challenge the AI driven optimism if orders or shipments do not materialize as expected.

Another View on AXT’s Valuation

The earlier narrative points to a fair value of $96.50 for AXT, with the stock screening as undervalued on that basis. Yet on simple P/S, AXT trades at 28.5x compared with 6.9x for the US Semiconductor industry and 3.2x for peers, while the fair ratio is 17.9x. That gap suggests investors are paying a steep premium today. Is this premium a sign of opportunity or a signal to tread carefully?

For a closer look at what this rich P/S multiple could mean for future returns, and how it might compress toward the fair ratio if expectations cool, See what the numbers say about this price — find out in our valuation breakdown.

Next Steps

With sentiment around AXT clearly mixed, this is a moment to move quickly, review the data for yourself and decide where you stand. To see the balance of potential upside and downside in one place, take a closer look at the 2 key rewards and 3 important warning signs.

Looking For More Investment Ideas Beyond AXT?

If you are serious about finding your next move after AXT, now is the time to scan a broader set of ideas before the market reacts.

• Target potential mispricings by checking stocks that screen as high quality and potentially overlooked through the 49 high quality undervalued stocks.
• Strengthen the defensive side of your portfolio by reviewing companies highlighted in the 83 resilient stocks with low risk scores.
• Hunt for under followed opportunities with strong fundamentals using the screener containing 20 high quality undiscovered gems.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.