AXT Inc's stock surged 14.35% during the overnight session, marking a significant upward movement for the semiconductor materials company.

The sharp rise follows a period of sustained profit-taking that pushed the stock into oversold territory, triggering a technical rebound phase. Fundamentally, the company is benefiting from China's continued tightening of export controls on indium phosphide (InP) and upstream high-purity indium, with rejection rates for export applications from U.S. and Japanese companies exceeding 80%. As a leading U.S.-listed InP substrate supplier, AXT commands a scarcity premium in a globally constrained market where it, Sumitomo Electric, and JX Metals collectively control over 90% of production capacity.

The broader semiconductor equipment and optical communication sectors provided additional tailwinds for the rebound, rallying strongly in overnight trading. This sector-wide strength occurred within a positive market context for technology stocks, driven by broader geopolitical developments.