AXT (AXTI) Stock Jumps on Three-Year Wafer Supply Deal With Coherent

TLDR

• AXT Inc (AXTI) surged over 19% Monday after announcing a three-year supply deal with Coherent Corp (COHR).
• AXT’s subsidiary AXT-Tongmei will supply 6-inch indium phosphide wafer substrates to Coherent through June 2029.
• Coherent will make a $22.3 million prepayment to fund capacity expansion at AXT’s Beijing facility.
• If Coherent misses minimum order requirements, the prepayment becomes nonrefundable; if AXT misses capacity targets for six months, Coherent can exit and get a refund.
• Wall Street rates AXTI a Moderate Buy, with an average price target of $92.50.

AXT (AXTI) stock surged more than 19% on Monday after the company revealed a three-year Master Development and Supply Agreement with Coherent (COHR).

AXT, Inc., AXTI

The deal, effective June 25, covers the supply of 6-inch indium phosphide (InP) wafer substrates from AXT’s subsidiary AXT-Tongmei to Coherent through June 2029.

At the heart of the deal is a $22.3 million prepayment from Coherent. That cash is earmarked to help AXT scale up manufacturing capacity at its Beijing facility between 2026 and 2028.

The prepayment will be drawn down against future wafer purchases at agreed-upon prices until it’s fully used up.

There are conditions on both sides. If the agreement ends and some of that prepayment hasn’t been applied, Coherent can request a refund — but only if it has met its minimum order quantities.

If Coherent falls short on those minimum orders, the remaining prepayment becomes nonrefundable and AXT has the right to terminate the deal.

Coherent also has an exit clause. If AXT fails to hit its production capacity commitment for more than six consecutive months, Coherent can walk away and get back any unused prepayment.

What the Deal Covers

Beyond the core supply terms, AXT has agreed to give Coherent first access to any manufacturing capacity it builds above the committed amount — at the same pricing terms.

The agreement was disclosed in an 8-K filing Thursday evening and includes standard clauses around confidentiality, force majeure, indemnification, and warranties.

InP wafer substrates are used in optical and communications applications, making Coherent — a major player in that space — a natural long-term customer.

COHR stock also moved higher on the news, gaining around 3.9% on Monday.

AXTI’s Broader Run

Monday’s move added to an already striking run for AXTI. The stock had already gained around 297% year-to-date before today’s jump, and is up more than 2,383% over the past 12 months.

Trading volume Monday came in at roughly 2.6 million — below the three-month average of 9.39 million — suggesting the price move happened on relatively light activity.

The Coherent deal isn’t the only supply agreement AXT has locked in recently. The company also announced a deal with Nanjing Casela Technologies in June 2026.

Analyst sentiment on AXTI is cautiously positive. The consensus rating is Moderate Buy, based on three Buy ratings and two Holds over the past three months. The average price target sits at $92.50, implying roughly 40% upside from current levels.

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