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This Hidden AI Stock Rises 5,100% While Bitcoin and Ethereum Drop Nearly 40%

While Bitcoin and Ethereum have fallen nearly 40% over the past 12 months, AXT Inc. has surged more than 5,100%, making it one of the most impressive AI-related stock stories in the financial markets this cycle.

We will review what AXT is doing, why its stock has soared, and how its performance compares to Bitcoin and Ethereum during this tough year for the crypto asset market.

How AXT Inc. Surged Over 5,100% in Just 12 Months

AXT Inc. is a California-based semiconductor company that manufactures high-performance compound substrates. Its flagship products include Indium Phosphide, along with Gallium Arsenide and Germanium, all of which are essential for advanced photonic and optical applications in AI.

The data truly speaks for itself. AXTI traded around US$1.74 in June 2025, then surged nearly to US$89 in early June 2026, representing a rally of over 5,100% during that period.

The stock briefly hit an all-time high above US$140 on May 22, 2026, before correcting about 35%. Despite the correction, AXTI’s annual gains remain very spectacular and are among the best across the entire stock market.

This rally occurred due to a surge in AI infrastructure demand. Major companies like Google, Amazon, Microsoft, and Meta accelerated data center construction, creating record backlogs for AXT and boosting expectations for large capacity expansions in the future.

AXT’s Indium Phosphide substrates power the latest generation of lasers and optical transceivers operating at speeds of 800G and 1.6T. These components enable ultra-fast connectivity within modern AI data centers, making them critically important for the entire ecosystem.

The company controls about 40% of the global Indium Phosphide supply. There are few substitutes in the short term, giving AXTI rare pricing power and nearly a monopoly on certain parts of the AI infrastructure supply chain.

In its Q1 2026 financial report released on April 30, AXT Inc.
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posted revenue of US$26.9 million, up 39% year-over-year from US$19.4 million.

The company successfully increased its gross margin to 29.6% (from -6.4% in Q1 2025), while narrowing GAAP net losses to US$1.6 million (US$0.03 per share), exceeding analyst expectations.

High demand for Indium Phosphide substrates for AI data centers was the main driver of these results, with a record backlog exceeding US$100 million.

How Bitcoin and Ethereum Performed Over the Same Year

Bitcoin and Ethereum experienced the opposite story. This crypto market leaders traded around US$110,000 a year ago, and are now around US$60,700, down about 40% over the same 12 months.

This week, conditions worsened sharply. Bitcoin faced heavy liquidations, falling more than 17% in just one week and dropping below US$60,000. The price approached the annual low point that many large holders did not anticipate.

Macroeconomic conditions also did not help. Spot Bitcoin ETFs recorded outflows of over US$1.7 billion just this week, the largest weekly outflow in over a year, according to SosoValue data. Meanwhile, strong US employment reports lowered expectations for future interest rate cuts.

Ethereum also experienced a similar decline. The asset traded around US$2,685 a year ago and is now about US$1,560, a correction of roughly 35% over the same 12-month period.

This week was also tough for ETH. The token fell more than 22% in 7 days, breaking key technical support levels and reflecting a risk-off sentiment now dominating both the crypto and traditional financial markets.

The story of AXTI offers a powerful lesson. In this AI cycle, some “picks and shovels” suppliers can deliver returns that far surpass the narratives of the most popular crypto assets, including Bitcoin and Ethereum, when compared over the same investment horizon.

But AXTI remains highly volatile. Its high valuation, dependence on the AI sector, and significant manufacturing exposure in China pose real risks. Its journey simply highlights the enormous potential hidden in the quieter parts of the AI supply chain.