I am mostly a trader engaging in both long and short bets intraday and occasionally over the short- to medium term. My historical focus has been mostly on tech stocks but over the past couple of years I have also started broad coverage of the offshore drilling and supply industry as well as the shipping industry in general (tankers, containers, drybulk). In addition, I am having a close eye on the still nascent fuel cell industry.I am located in Germany and have worked quite some time as an auditor for Pric ...

Investment Rating - The report maintains an "Overweight" rating for the communication industry [5]. Core Insights - The communication industry experienced steady revenue growth and accelerated profitability in H1 2025, with total revenue reaching 1,785 billion yuan, a year-on-year increase of 10.07%, and net profit attributable to shareholders at 160.43 billion yuan, up 11.26% year-on-year [2][8]. - In Q2 2025, the industry continued to show robust growth, with revenue of 942.48 billion yuan, reflecting a year-on-year increase of 10.91%, and net profit attributable to shareholders of 98.68 billion yuan, up 12.33% year-on-year [11]. - Key sectors such as optical modules, communication PCBs, network equipment manufacturers, and IoT modules demonstrated strong performance, ranking among the top five in revenue and net profit growth rates [14][16]. Summary by Sections 1. H1 2025 Performance Overview - The communication industry achieved total revenue of 1,785 billion yuan in H1 2025, with a year-on-year growth of 10.07%, and net profit attributable to shareholders of 160.43 billion yuan, up 11.26% year-on-year [2][8]. 2. AI Industry Chain Investment - Overseas cloud vendors are expected to maintain optimistic growth in capital expenditures, with a total of 95 billion USD in Q2 2025, marking an increase of 82.96% year-on-year [22]. - Major companies like Apple and Meta are significantly increasing their investments in AI infrastructure, indicating a robust outlook for the AI industry chain [22][24]. 3. Sector Performance Changes - The optical module and device sector reported revenue of 479.88 billion yuan in H1 2025, with a year-on-year increase of 64.88%, and net profit of 108.76 billion yuan, up 111.99% year-on-year [31]. - The communication PCB sector achieved revenue of 572.49 billion yuan in H1 2025, reflecting a year-on-year growth of 37.66%, and net profit of 80.58 billion yuan, up 80.79% year-on-year [36]. - The network equipment sector generated revenue of 5,071.11 billion yuan in H1 2025, with a year-on-year increase of 28.86%, and net profit of 191.84 billion yuan, up 19.57% year-on-year [40]. 4. Telecom Operators' Performance - The basic telecom operators' sector reported revenue of 10,133.93 billion yuan in H1 2025, a slight increase of 0.33% year-on-year, with net profit of 1,136.01 billion yuan, up 5.14% year-on-year [54]. - China Mobile's total connections reached 3.815 billion, with a net increase of 145 million, and its digital transformation revenue grew by 6.6% year-on-year [55].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended June 30, 2025 Or ☐ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from to Commission File Number 000-24085 AXT, INC. (Exact name of registrant as specified in its charter) DELAWARE 94-3031310 (State or other jurisdiction of Incorp ...

Group 1 - AXT, Inc. reported Q2 2025 earnings with a decrease in revenue and gross profit both quarter-over-quarter (QoQ) and year-over-year (YoY) [1] - The primary reason for the decline in financial performance was delays in export permits [1] - The company has identified a higher demand for its products in China [1]

Core Insights - AXT reported a significant revenue decline in Q2 2025, with GAAP revenue at $18.0 million, missing analyst estimates by 9.0% [1][5] - Non-GAAP loss per share was ($0.15), worse than the expected ($0.13), reflecting ongoing challenges in the market [1][2] - The company is facing persistent operational difficulties, including regulatory delays and weak demand in China [1][8] Financial Performance - GAAP revenue decreased by 35.5% year-over-year from $27.9 million in Q2 2024 [2] - Non-GAAP gross margin improved to 8.2% from negative territory in the previous quarter but is down from 27.6% in Q2 2024 [2][6] - Net loss on a non-GAAP basis increased to ($6.4 million), a 700.0% rise compared to the previous year [2] Business Overview - AXT specializes in manufacturing compound semiconductor substrates, including gallium arsenide (GaAs), indium phosphide (InP), and germanium (Ge) [3] - These substrates are critical for applications in data centers, wireless communication, 5G, LED technology, and automotive sectors [3] Strategic Focus - The company is concentrating on high-growth areas such as AI-driven optical interconnects and maintaining a vertically integrated supply chain [4] - AXT aims to expand manufacturing scale and secure export permits to mitigate geopolitical and regulatory risks, particularly in China [4] Market Trends - There is emerging demand for InP substrates in AI-related applications, with successful exports outside China following new permit approvals [7] - However, overall demand remains soft across other end markets, impacting revenue [7] Operational Challenges - Geopolitical and regulatory issues, especially concerning China, have significantly affected sales and operational efficiency [8][11] - The complexity of export permit processes has delayed expected sales, contributing to the revenue decline [5][8] Future Outlook - The company is focused on improving operational efficiency and expanding market access outside China as new export permits are granted [12] - Early signs of demand recovery for AI-driven applications are noted, but they are still small relative to the company's overall scale [12]

Company Performance - AXT reported a quarterly loss of $0.15 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.13, and compared to a loss of $0.02 per share a year ago, indicating a significant decline [1] - The company posted revenues of $17.97 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 0.53%, but down from $27.92 million year-over-year [2] - AXT has surpassed consensus revenue estimates three times over the last four quarters, but has only exceeded consensus EPS estimates once in the same period [2] Stock Outlook - AXT shares have underperformed the market, losing about 2.3% since the beginning of the year, while the S&P 500 has gained 8.2% [3] - The current consensus EPS estimate for the coming quarter is -$0.09 on revenues of $23.78 million, and -$0.45 on revenues of $91.11 million for the current fiscal year [7] - The estimate revisions trend for AXT was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market [6] Industry Context - The Electronics - Semiconductors industry, to which AXT belongs, is currently in the top 30% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Data and Key Metrics Changes - Revenue for Q2 2025 was $18 million, down from $19.4 million in Q1 2025 and $27.9 million in Q2 2024 [5] - Non-GAAP gross margin improved to 8.2% in Q2 2025 from a negative 6.1% in Q1 2025 and 27.6% in Q2 2024 [6] - Non-GAAP operating loss for Q2 2025 was $6.1 million, an improvement from a loss of $9.6 million in Q1 2025 and a loss of $1.2 million in Q2 2024 [7][9] - Cash and cash equivalents decreased by $3.1 million to $35.1 million as of June 30, 2025 [10] Business Line Data and Key Metrics Changes - Revenue breakdown for Q2 2025: Indium phosphide at $3.6 million, gallium arsenide at $6.2 million, and germanium substrates at $1.5 million [5] - Revenue from consolidated raw material joint ventures was $6.7 million in Q2 2025, a decline of approximately $1.6 million compared to Q1 2025 [21] Market Data and Key Metrics Changes - Revenue from Asia Pacific accounted for 90% of total revenue, while Europe contributed 9% and North America only 1% [5] - The China data center optical interconnect market is estimated to be around one-third of the global market, with most optical devices sourced from outside China [17] Company Strategy and Development Direction - The company plans to list its subsidiary, Tongmei, on the STAR Market in Shanghai, keeping its IPO application current despite geopolitical challenges [11] - AXT is focusing on improving gross margins and driving recovery in Q3, with expectations of sequential revenue growth to between $19 million and $21 million [24] Management's Comments on Operating Environment and Future Outlook - Management noted that export permit delays for gallium arsenide and indium phosphide have impacted revenue, but they expect improvements in permit processing in July [12][15] - The company anticipates a 30% or more growth in total indium phosphide revenue in Q3 due to increased demand in AI-related applications and data center connectivity [18] Other Important Information - The company has a backlog of over $10 million in customer orders for gallium arsenide and indium phosphide substrates [21] - Management emphasized the importance of low EPD material in high-speed interconnect devices, which is driving demand for indium phosphide [22] Q&A Session Summary Question: Concerns about potential share loss due to permitting delays - Management acknowledged the delays but expressed confidence in their healthy backlog and the growing market demand, indicating that the business remains strong long-term [29][30] Question: Resolution of yield issues with germanium arsenide - Management confirmed that yield issues have been resolved and they are taking a conservative approach to business opportunities with that customer [34][35] Question: Insights on market growth and backlog - Management noted that demand for optical interconnectivity is growing rapidly, and they expect to see an increase in orders once permits are received [41][44] Question: Reasons for slowed gallium arsenide export licenses - Management indicated that the slowdown is industry-wide and not specific to AXT, but they have seen improvements in permit approvals recently [50][52] Question: Advanced order making and inventory building by customers - Management stated that while customers are eager to place larger orders, they are not yet at the stage of building significant inventory due to ongoing permit issues [54][55]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 4281 Technology Drive Fremont, California 94538 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (510) 438-4700 Not Applicable (Former name or former address, if changed since last report) Check the appropriate box below if the Form 8‑K filing is intended to simultaneously satisfy the fili ...

Company Overview - AXT (AXTI) is expected to report a year-over-year decline in earnings due to lower revenues for the quarter ended June 2025, with a consensus estimate indicating a quarterly loss of $0.13 per share, representing a -550% change from the previous year [1][3] - Revenues are projected to be $19.96 million, down 28.5% from the same quarter last year [3] Earnings Expectations - The consensus EPS estimate has been revised 3.13% lower in the last 30 days, reflecting a reassessment by analysts [4] - AXT's Earnings ESP (Expected Surprise Prediction) is currently at 0%, indicating no recent differing analyst views from the consensus estimate [12] Historical Performance - In the last reported quarter, AXT was expected to post a loss of $0.13 per share but actually reported a loss of -$0.19, resulting in a surprise of -46.15% [13] - Over the last four quarters, AXT has beaten consensus EPS estimates two times [14] Industry Context - Another player in the semiconductor industry, Impinj (PI), is expected to report earnings of $0.71 per share for the same quarter, reflecting a year-over-year change of -14.5% [18] - Impinj's revenues are expected to be $93.97 million, down 8.3% from the previous year [18] - Impinj's consensus EPS estimate has been revised down 100% in the last 30 days, and it currently has an Earnings ESP of -0.94% combined with a Zacks Rank of 4 (Sell), making it difficult to predict an earnings beat [19]

Group 1 - AXT Inc (AXTI) has reached a key level of support, with its 50-day simple moving average crossing above its 200-day simple moving average, indicating a "golden cross" which is a bullish signal for potential breakout [1] - The golden cross consists of three stages: a downtrend that bottoms out, the shorter moving average crossing above the longer moving average, and the stock continuing to rise [2] - AXTI shares have increased by 24.7% over the past four weeks, and the company holds a 3 (Hold) rating on the Zacks Rank, suggesting a potential breakout [3] Group 2 - The positive earnings outlook for AXTI is supported by no earnings estimate cuts and one revision higher in the past 60 days, with the Zacks Consensus Estimate also increasing [3] - The combination of earnings estimate revisions and the technical level achieved makes AXTI a stock to watch for potential gains in the near future [4]