Key Highlights

  • AXTL rose 9.02% to $1.45 on Friday, October 23, after a 26.52% drop to $1.33 on October 22.
  • The implied AXT gain today is about 4.5%, calculated from the 2x factor.
  • Thursday's fall implies AXT dropped roughly 13%, calculated.
  • The fund charges 0.99% and held about $5.46 million in assets.
  • AXT's second-quarter revenue was $47.6 million versus $18.0 million a year earlier.

Export Permits: Why Is China Supply Central to AXT's Risk Profile?

Leverage Shares 2X Long AXTI Daily ETF (CBOE:AXTL) rose 9.02% to $1.45 on Friday, October 23, after dropping 26.52% to $1.33 on Thursday. The fund seeks twice the daily move of AXT (NASDAQ:AXTI), so the figures imply a gain of about 4.5% today and a decline of about 13% on October 22, both calculated.

AXT manufactures in China and has named receipt of export permits for indium phosphide substrates as a risk in its July 30 release. A report in August also noted that if the United States limited Chinese optical transceivers, China could respond by restricting indium phosphide exports, though no such action has been confirmed.

Fund Mechanics: What Does a $1.45 Price Tell Us?

Leverage Shares launched AXTL on June 16, 2026, with a 0.99% expense ratio and about $5.46 million in assets. A price near $1.45 is unusually low for a 2x fund, which shows how much value daily swings can remove. A fall of 26.52% followed by a rise of 9.02% leaves the fund at about 80% of its Wednesday close, calculated, a loss of roughly 20%.

By comparison, AXT's two-day move was about minus 9% to minus 10% on the implied figures, so twice that would be a loss near 18% to 20% before compounding effects. Low-priced funds can also show wider percentage moves from small absolute price changes. Corgi charges 0.45% on its own 2x long AXT fund and T-REX charges 1.50%, so sponsors price the same exposure quite differently.

AXT's Operating Story: What Do the Results Show?

AXT is a Fremont, California, maker of indium phosphide, gallium arsenide and germanium wafers. Second-quarter revenue rose to $47.6 million from $18.0 million, GAAP gross margin reached 44.9% from 8.0%, and the company held $412.2 million in cash at June 30.

The shares are volatile in both directions. They climbed about 351% in 2026 by August 11 and fell about 12% on August 18 and 24 as optical names sold off, including a drop tied to a $600 million equity program at Applied Optoelectronics (NASDAQ:AAOI).

That sensitivity to peer news is why a supplier with a small revenue base can move more than larger customers, and why a 2x fund on it can post double-digit daily changes without any change in its own fundamentals.

Next Steps: Which Events Could Move the Shares?

Investors will watch the third-quarter report from AXT, any update on export permits, and results from Lumentum (NASDAQ:LITE) in early November. Optical stocks also reacted in mid-October to comments about AI funding constraints, so spending signals from large customers remain a key input. Coherent (NYSE:COHR), a major indium phosphide user, guided fiscal first-quarter revenue to $2.2 billion to $2.4 billion.

Leveraged funds are built for one day. This article is informational and not advice.