AXT Inc. (NASDAQ:AXTI) extended its winning streak to a fifth straight day on Monday, surging by as much as 16.4 percent in intraday trading to $81.50, as investors resumed buying positions amid its official membership in the S&P 600 index.
Effective on the same day, the listed firm officially joined the S&P 600 index alongside nine other companies, namely Herc Holdings, Delek US Holdings, Arcutis Biotherapeutics, AtriCure, Capri Holdings, Boston Beer, Moison Coors Beverage, The Trade Desk, and Builders FirstSource.
They replaced 10 other stocks, including Verra Mobility, Amerisafe, and Cogent Communications, to name a few.
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Companies being added to indices typically see large movements in their share prices as institutions tracking the indices they belong to are required to rebalance their portfolios to mirror the composition.
For AXT Inc., the addition was a significant milestone, as being added to indices means higher exposure for its stock among global and institutional investors.
Optics Sector Outlook More Bullish
Last week, AXT Inc. was named by Needham & Company as one of the five semiconductor beneficiaries in the accelerating co-packaged optics sector, alongside Coherent Corp. and Lumentum Holdings.
Following a five-day visit to Semicon Taiwan 2026, Needham underscored the huge role of co-packaged optics in helping debottleneck artificial intelligence networks through 2028 and beyond, and that AXT Inc.’s (NASDAQ:AXTI) indium phosphide substrate is at the center of it.
Last July, Needham upgraded AXT to buy from hold, while issuing a $90 price target. The price target still held a double-digit upside potential from its current price.
Stellar Q2
In the second quarter alone, the listed firm swung to a net income of $13.03 million from a $7.67 million net loss in the same period last year.
Total revenues more than doubled to $47.59 million from $17.97 million year-on-year, thanks to record revenues from indium phosphide.
AXT Inc. attributed the results to strong customer demand for data center optical connectivity, which complemented its manufacturing capacity and improving productivity.
Hedge Fund Conviction Strengthens
Institutional conviction remained strong for the stock in the second quarter of the year despite a drop in the number of hedge fund holders during the period.
Data from Insider Monkey said that 33 hedge funds held positions in AXT Inc. in the second quarter, down from 37 in the first quarter of the year.
However, the remaining investors propped up their committed capital by 34 percent to $487.9 million from $363.7 million quarter-on-quarter, signaling that they remained bullish about the long-term growth prospects for the stock.
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