AXT stock falls after lowering Q2 revenue guidance on export challenges
Investing.com | Editor Luke Juricic
Published Jul 10, 2025 08:44AM ET
Investing.com -- AXT, Inc. (NASDAQ:AXTI) stock fell 11.4% after the compound semiconductor substrates manufacturer lowered its second quarter revenue guidance due to slower-than-expected export permit issuances and weaker demand in China.
The company now expects preliminary revenue for the second quarter of 2025 to be between $17.5 million and $18 million, below its previously stated guidance of $20 million to $22 million provided on May 1, 2025. The revenue shortfall primarily stems from delays in export control permits for gallium arsenide products and a softer Chinese market.
"Though we continue to feel confident about our participation in a number of exciting technology trends, the current geopolitical environment remains challenging across our business," said Morris Young, chief executive officer. Young noted that despite revenue challenges, the company saw increased AI-related demand for indium phosphide in China during the quarter.
AXT also reported that its subsidiary, Beijing Tongmei Xtal Technology Co., received its first export control permits for indium phosphide late in the quarter. Despite the revenue shortfall, the company expects to deliver gross margins in the high single digits for Q2 2025.
B.Riley analyst David Kang lowered the price target on AXT, Inc. to $4.30 from $4.50 while maintaining a Buy rating. The analyst commented, "Lowering PT from $4.50 to $4.30 based on an unchanged EV/sales multiple of 1.8x our 2026 revenue estimate, less net debt."
AXT is scheduled to announce its full financial results for the second quarter on July 31, 2025.
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