10 Best Semiconductor Penny Stocks To Buy

2. AXT, Inc. (NASDAQ:AXTI)

Number of Hedge Fund Investors: 19

AXT, Inc. (NASDAQ:AXTI) is an important backend semiconductor equipment provider since it offers substrates for chip makers to print circuits on and produce the final product. Products from this diverse company are utilized in communications, power management, data centers, solar, and autonomous applications.

Although AXT, Inc. (NASDAQ:AXTI) reported Q1 2024 results that were in line with forecasts, the company has seen volatility throughout the years and encountered certain difficulties. Despite good sequential growth in substrate revenues and positive Q2 expectations from management, the company’s cash balance dropped by around $12 million as a result of increased capital expenditures and temporary working capital needs. Concerns have been raised over the durability of the rebound and possible hold-ups in Tongmei’s Shanghai STAR Market listing. Investor anxiety is increased by reports from short sellers casting doubt on the company’s operations.

AXT, Inc. has attractive prospects while it is on the road to recovery. The company’s Q1/2024 results were in line with forecasts; all product lines showed excellent sequential growth, and demand for AI-related products contributed to a noteworthy 50% rise in indium phosphide sales. The strategic agility of the management is demonstrated by its proactive approach to decreasing inventory by $10 million and investigating the monetization of Chinese joint ventures.

Analysts maintain their confidence and estimate a positive near-term price objective of $5.38, with a potential upside of 43.47% and a “strong buy” rating. AXT’s gross profit grew by 7.36% in TTM from 2023, pointing to increased operational effectiveness and profitability. As long as AXTI maintains its focus on operational effectiveness and returns to profitability, it will be in a strong position to thrive in the semiconductor industry. Getting regulatory permission for Tongmei’s initial public offering (IPO) may unleash significant value and position AXT for profitability and future stock gains as it moves toward growth and financial stability.

At the end of Q1 of 2024, AXT, Inc. (NASDAQ:AXTI) was held by 19 hedge funds, with George Mccabe’s Portolan Capital Management holding the largest stake of 1,596,232 shares valued at a total of $7.32 million.