AXT Stock Rallies on Multi-Year Supply Agreement with Coherent Corp.

AXT, Inc. (AXTI) stock experienced a significant rally in morning trading, rising over 6% while major indices like the S&P 500 and Dow were in decline. The upward momentum is largely attributed to a new supply agreement with Coherent Corp., a key player in the optical networking space.

Disclosed in a regulatory filing on July 2, 2026, AXT’s subsidiary AXT-Tongmei entered into a three-year Master Development and Supply Agreement with Coherent. The deal, which extends through June 2029, involves the supply of 6-inch indium phosphide wafer substrates, a critical component for AI data center infrastructure. The agreement also includes a $22.3 million prepayment from Coherent, which will be used to expand AXT’s manufacturing capacity at its Beijing facility between 2026 and 2028.

This contract builds on other recent business wins for the company. AXT-Tongmei had previously announced a long-term supply contract with Nanjing Casela Technologies worth approximately $25.4 million. The positive news flow has been supported by analysts, with Northland Capital reiterating an "Outperform" rating on the stock with a $125 price target.

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Other factors contributing to investor interest include AXT's recent inclusion in the Russell 2000 index, which can drive demand from institutional funds. The company's next earnings release is scheduled for July 30, 2026, when investors will look for more details on how these new agreements are impacting financial results.