On October 2, AXT Inc rose 5.52% in regular trading, trading at $86.435/share, with turnover of $255 million. The rally was driven by reports that AXT plans a 10% price increase on indium phosphide (InP) substrates in Q4, marking a historic single-quarter hike and the fourth consecutive price increase.

Downstream demand remains robust, with major customers aggressively locking in capacity. Lumentum has reportedly paid a $43.5 million deposit to secure AXT InP substrate capacity through 2031, while Coherent prepaid $22.3 million to lock 6-inch substrate supply. Additionally, the anticipated delay of co-packaged optics (CPO) deployment to 2029 is expected to extend the pluggable optical module expansion cycle, further underpinning InP substrate demand.

The broader optical communication sector rallied in tandem, with Lumentum, Coherent, Corning, and Applied Optoelectronics all posting gains. Industry analysts note that optical chips remain the highest-barrier segment facing the most acute supply-demand imbalance, with the sector poised for a new cycle of rising volumes and prices as high-speed 1.6T and 3.2T optical module demand accelerates.

AXT Inc is a compound semiconductor substrate manufacturer headquartered in Fremont, California. Its next earnings report is scheduled for October 29, with consensus EPS estimate of $0.30.

(The above content is based on publicly available market information, generated by a program or algorithm, and is intended solely as a stock movement alert. It does not constitute investment advice or a basis for trading decisions.)