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    AXT (AXTI) Could Be 37% Undervalued Following Its Sharp Pullback

    Simply Wall St·09/16/2026 08:23:07
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    AXT (AXTI) has attracted fresh attention after recent price swings, with the share price up 1.1% on the day but down 17.1% over the past week. Investors are reassessing what the semiconductor substrate specialist’s fundamentals might imply.

    Recent trading has been choppy for AXT, with the share price falling 29.3% over the past 30 days and 37.4% over 90 days. However, the year-to-date share price return of 244.3% and a very large 1-year total shareholder return suggest earlier momentum has cooled, while longer term holders still sit on substantial gains as expectations and risk perceptions reset around the US$57.70 level.

    Scan beyond AXT’s sharp swings and line up other fast-moving semiconductor players with the hand-picked 60 AI infrastructure stocks that are also exposed to data centers and AI hardware demand.

    After a surge like AXT has seen, followed by a sharp pullback to US$57.70, the real puzzle is where fair value sits between that price and the wide spread of analyst and intrinsic estimates.

    Most Popular Narrative: 37% Undervalued

    On the most followed narrative, AXT is framed as trading well below an implied fair value of $91.60 compared with the last close at $57.70. That gap rests on aggressive assumptions about AI related demand, profitability, and what investors are willing to pay for those future earnings.

    Accelerating global demand for high-speed data center connectivity and AI infrastructure is driving increased adoption of indium phosphide substrates, where AXT is a top supplier with 40% share. As export permit headwinds ease, this pent-up demand is expected to produce sharp revenue growth and improved utilization of manufacturing capacity.

    See why 38 investors see AXT as 37% undervalued.

    Result: Fair Value of $91.60 (UNDERVALUED)

    Still, AXT’s heavy reliance on Chinese customers and ongoing export permit uncertainty could squeeze sales and margins if those bottlenecks persist or worsen.

    Find out about the key risks to this AXT narrative.

    Another View: AXT Looks Expensive On Sales

    AXT may screen as undervalued against the $91.60 narrative fair value, yet its current P/S of 29.5x is far above the US Semiconductor industry at 6.2x and the peer average at 3.3x. It is also higher than its own 24x fair ratio, which raises the question of how much optimism is already in the price.

    To see how that rich P/S compares with the rest of the market, and how the fair ratio might shift as forecasts change, See what the numbers say about this price — find out in our valuation breakdown.

    NasdaqGS:AXTI P/S Ratio as at Sep 2026
    NasdaqGS:AXTI P/S Ratio as at Sep 2026

    Next Steps

    Curious whether the mixed sentiment around AXT matches your own view of the balance between risk and reward? Review the full picture for yourself by weighing 2 key rewards and 3 important warning signs.

    Looking for more AXT investment ideas?

    If AXT has sharpened your interest in new opportunities, do not stop here. Use the Simply Wall Street Screener to quickly surface fresh ideas tailored to your style.

    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.