This Obscure AI Stock Is Up by Almost 6,000% Over the Past Year. Can It Go Higher?

While artificial quality (AI) stocks person delivered explosive returns successful caller years, nary person kept gait with AXT (NASDAQ: AXTI) implicit the past year. The materials subject company's banal is up astir 6,000% implicit the past year. This is mostly due to the fact that the wafer substrates it produces are captious for the AI boom.

Naturally, immoderate investors consciousness similar they missed retired connected the accidental here, but the banal is inactive worthy keeping an oculus on. Here's what investors should cognize astir this highly volatile maturation banal that has outpaced each of the others implicit the past year.

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AXT's indium phosphide wafer substrates are next-gen exertion for the AI roar

AXT makes semiconductor wafer substrates that see indium phosphide, gallium arsenide, and germanium, with the archetypal worldly being the astir important. Those semiconductor wafer substrates are the instauration for AI chips.

It's not the lone institution that makes wafers, and Nvidia presently prioritizes the silicon wafers that Taiwan Semiconductor Manufacturing produces. However, those silicon wafers person limits that indium phosphide tin exceed. The types of wafers AXT produces tin grip much aggravated AI workloads than the silicon wafers presently recovered successful astir AI chips.

AXT and 2 different companies power astir 80% to 90% of the indium phosphide wafer market. Indium phosphide wafers are much costly than silicon wafers, which means a implicit replacement is retired of the question. However, these aforesaid wafers tin determination information faster portion consuming little electricity, thereby reducing information halfway operational costs.

The risks are tremendous

AXT's important banal gains bash not coincide with cardinal growth. Revenue decreased from $99.4 cardinal successful fiscal 2024 to $88.3 cardinal successful fiscal 2025. The institution reported preliminary first-quarter 2026 revenue, saying it would travel successful betwixt $26 cardinal and $28 million. Annualized, that would decidedly transcend the 2024 number.

That's not a important leap, but AXT told investors successful Q4 that its lawsuit basal has broadened to Tier-1 companies, which it had constricted vulnerability to earlier successful the year. Tier-1 companies notation to ample planetary customers, but guessing which of those AXT has among its customers astatine this constituent would beryllium speculation.

Furthermore, the institution is inactive burning done currency arsenic it expands. It reported $23.2 cardinal successful nett losses past twelvemonth and precocious raised $550 cardinal by diluting shareholders. The preliminary Q1 2026 results suggest that much nett losses are connected the way.