One year ago today, President Trump stepped into the White House Rose Garden and declared April 2, 2025, “Liberation Day.” He unveiled reciprocal tariffs — a 10% baseline on most imports and far higher rates on China — to shrink trade deficits and force manufacturing home.
Stocks dropped hard at first, yet the S&P 500 rose 16% over the next 12 months. Many companies shook off the scare and beat the market. One left everyone else behind: AXT (NASDAQ:AXTI). Its shares delivered a 3,353.60% return in the same period.
Let’s see why this little-known maker of compound semiconductor wafers turned tariff noise into the year’s biggest winner.
Liberation Day Delivered a Short-Term Punch
AXT’s factories sit mainly in China, so the new tariffs and tightened export controls hit immediately. The company faced delays securing permits for indium phosphide shipments. Full-year 2025 revenue fell to $88.326 million, down 11.1% from $99.361 million in 2024. Gross margin narrowed to 12.7% from 24.0%. The stock wobbled early as investors worried about supply-chain snags.
That said, the broader market proved resilient. The S&P 500’s gain showed tariffs did not derail growth the way many feared. While the market would tumble hard on every presidential tariff pronouncement, soon stocks began to shrug them off.
Smart investors, though, who looked past the headlines spotted something bigger at AXT: a direct tie to the AI build-out.
AI Infrastructure Fueled the Real Surge
AXT produces indium phosphide (InP) wafers used in high-speed optical transceivers that move data inside AI data centers. Demand exploded. In the fourth quarter of 2025 alone, InP revenue reached $8 million — mostly from data-center applications — while the company’s InP backlog topped $60 million.
Management expects sequential revenue growth in Q1, driven by InP. The company plans to double InP manufacturing capacity by the end of 2026, repurposing existing gallium arsenide lines at low cost. That positions AXT to capture more of the AI photonics wave without massive new capital outlays. In short, tariffs created temporary friction, but AI orders provided the thrust.
How AXTI Stacks Up Against Peers
No other stock in its space came close. Here’s the side-by-side picture of one-year returns for AXT and its industry peers:
- AXT: +3,353.60%
- Advanced Energy Industries (NASDAQ:AEIS): +244.29%
- Amkor Technology (NASDAQ:AMKR): +150.67%
- Onto Innovation (NYSE:ONTO): +71.83%
- S&P 500: +16.08%
AXT trades at a price-to-sales ratio of 32.19 with a market cap of $2.94 billion and 55.57 million shares outstanding. It carries a trailing P/E of roughly -110 because 2025 produced a net loss of $0.49 per share. That reflects investment mode — capacity expansion and R&D — not weakness. Peers with steadier profits look cheaper on paper, but none matched AXT’s InP exposure to hyperscale AI spending.
Key Takeaway
AXT turned Liberation Day’s uncertainty into the clearest AI infrastructure winner of the past year. The numbers tell the story: a 3,353.6% gain powered by InP demand that more than offset tariff-related permit delays. That said, risks remain plain. Revenue still fell 11.1% in 2025, the valuation sits far above historical norms, and ongoing export approvals will matter.
For retail investors who believe AI data-center spending stays hot, AXT offers high-upside exposure to a narrow but critical supply-chain link. Watch the Q1 results expected for later this month for confirmation that sequential growth has begun.
It’s not likely AXT will duplicate its performance by April 2, 2027, but the AI data center build out remains strong. While that suggests there is more upside potential, it also warrants not being overly aggressive yet. Instead, wait for the pullback sure to come before diving in.
Top Gaining Stocks
Top Losing Stocks