Key Highlights

● AXT slid to $59.65 on October 29 with no company-specific news.

● The PHLX Semiconductor index fell, ending a four-day winning streak.

● A report said Marvell is in advanced talks to acquire Lumentum.

● Information technology was one of only three S&P 500 sectors to fall.

AXT Inc. (NASDAQ:AXTI) had no company-specific news on Thursday, but the maker of compound semiconductor substrates slid as chip and optical-networking stocks retreated across the board.

Caught in the sector current

AXT Inc. slid on Thursday, October 29, trading at $59.65 according to market data, as a broad pullback in semiconductor and optical stocks pulled the small-cap supplier lower. The stock was among the decliners in the Russell 2000 on a day when most small caps rose.

There was no company-specific news behind the move. AXT did not release results or announce a deal. Instead, the stock moved with its sector, which had a rough session.

A four-day streak snaps

The PHLX Semiconductor Index fell on Thursday, ending a four-day winning streak, according to market data. The selling hit chip designers, equipment makers and component suppliers alike.

Marvell (NASDAQ:MRVL) was one of the biggest decliners in the S&P 500. One report said Marvell is in advanced talks to acquire Lumentum (NASDAQ:LITE), a maker of optical and photonic components, possibly as soon as next week. Neither company confirmed the reported talks. Lumentum edged higher, while other optical names, including Applied Optoelectronics (NASDAQ:AAOI), Ciena (NYSE:CIEN), Coherent (NYSE:COHR) and Corning (NYSE:GLW), were active on the news, according to market data.

AMD (NASDAQ:AMD) also slipped, and after the close Intel (NASDAQ:INTC) fell sharply in extended trading on weak fourth-quarter guidance.

Why AXT trades with the optical crowd

AXT makes substrates, the thin wafers of materials such as indium phosphide and gallium arsenide on which certain chips and lasers are built. Those materials are critical for optical transceivers used in data centers and telecommunications networks, as well as for some wireless and sensing applications.

Because its products feed into the optical Supply chain, AXT often moves with companies such as Lumentum, Coherent and Applied Optoelectronics. When sentiment toward optical networking shifts, AXT tends to follow, even without news of its own.

The AI trade wobbles

The bigger story on Thursday was a reassessment of the AI trade. Alphabet (NASDAQ:GOOGL) suffered its worst day since its 2004 IPO, erasing roughly $500 billion in market value, after its results "reignited concerns over mounting AI costs," according to media reports. The company maintained its Capital spending guidance of $195 billion to $205 billion for 2026, but reported negative free cash flow.

For suppliers to AI data centers, the reaction was mixed. Heavy spending by hyperscalers supports Demand for optical components and the materials behind them, but investors are increasingly asking whether that spending can last. "markets are no longer rewarding companies simply for investing heavily in AI," one market analyst said.

Small caps rose, chips did not

The Nasdaq Composite tumbled 365.13 points to 26,184.72, while the S&P 500 slipped 23.59 points to 7,720.39. The Russell 2000, by contrast, gained 28.71 points to 2,859.22 as investors rotated into health care, financials and real estate.

Information technology was among only three S&P 500 sectors to fall, according to market data. "Money is rotating within the market rather than leaving it," said one market strategist. AXT was on the wrong side of that rotation.

What to watch

With no company news driving the move, AXT's near-term direction is likely to depend on sector sentiment. Any confirmation or denial of the reported Marvell–Lumentum talks could ripple through optical stocks.

Investors will also watch Amazon (NASDAQ:AMZN)'s and Intel's after-hours results for read-throughs on Data Center spending, as well as any company updates on demand for indium phosphide substrates. The Fed's December 8–9 decision and Friday's Employment Cost Index could also affect appetite for high-growth technology names.