Kioxia shares plunge 17%, cautious guidance sparks concerns over AI memory super-cycle

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Is the AI storage super cycle changing? Kioxia's stock price plunged 17%, a "knee-cap cut" from its historical high

Cailianshe Bian Chun | Editor: Lin Qi | 2026-11-02 12:10

① On Monday, the stock price of Japan's NAND flash leader Kioxia plunged as much as 17%; ② The company's somewhat cautious performance guidance given last Friday disappointed investors, and the market is once again worried that the explosive growth momentum driven by AI may be slowing; ③ Kioxia's potential disadvantage may lie in its focus on NAND flash.

Cailianshe, November 2 (Editor: Bian Chun) — On Monday, the stock price of Japan's NAND flash leader Kioxia plunged as much as 17%, as the company's somewhat cautious performance guidance given last Friday disappointed investors, and the market is once again worried that the explosive growth momentum driven by artificial intelligence (AI) may be slowing.

As of Monday's publication time, Kioxia's stock price had fallen 13.29% to 11,680 yen, down nearly 70% from the historical high set in June this year. However, year to date, the stock is still up as much as 2x.

In June this year, benefiting from the storage super cycle driven by the AI wave, Kioxia once jumped to become the listed company with the highest market value in Japan.

The trigger for Monday's selloff was not poor financial results. Kioxia's financial report released last Friday showed that in the second fiscal quarter of fiscal 2026 ended September, the company's revenue reached 2.48 trillion yen, a year-on-year increase of 453.20%, with single-quarter revenue already exceeding the approximately 2.34 trillion yen for the entire previous fiscal year; adjusted operating profit surged 2181.10% year on year.

The problem lies in the outlook. Kioxia forecast last Friday that operating profit for the December quarter would be 2 trillion yen (about $12.7 billion), below the 2.35 trillion yen generally expected by analysts.

The forecast indicates that compared with the operating profit of 1.99 trillion yen recorded in the September quarter, growth has almost stalled. In the past several quarters, Kioxia's operating profit had been showing a strong upward trend.

Kioxia mainly attributed the weak growth to shipment timing issues rather than deteriorating demand.

At customers' request, some orders originally scheduled for delivery this quarter were moved forward to the September quarter; other orders were postponed to the March quarter of the following year, because the share of enterprise storage product orders increased, and such products require longer production cycles.

Kioxia Chief Financial Officer Yoshihiko Kawamura said on a conference call last week that the company expects to return to a rapid growth track in the March quarter next year, and demand from AI data center operators remains strong.

He said the company's planned capacity for next year has already sold out, and more than half of the capacity for the year after has been allocated. Some major customers have even begun negotiating contracts for 2029 and beyond.

However, investors are increasingly doubtful about the growth narrative Kioxia has portrayed, because company executives have taken a cautious tone when looking ahead.

Kioxia's potential disadvantage may lie in its focus on NAND flash, while its South Korean competitors also sell DRAM chips — another key component in AI computers — and therefore have stronger bargaining power.

In the second quarter of 2026, Kioxia's average NAND selling price rose about 70% quarter on quarter, while by the third quarter the increase had plunged to about 20%. This price signal also alerted the market and became one of the key factors weighing on investor sentiment.

For storage chip stocks, the market usually pays more attention to the speed of price changes than the absolute price level, and this signal was interpreted as a possible inflection point in the current upward cycle.

On Monday, Samsung Electronics fell more than 3% in early trading and SK Hynix fell more than 1%, but both later reversed their losses. As of publication time, Samsung's stock price was up 0.44% and Hynix's stock price was up 2.75%.

Another important factor exacerbating Monday's decline was the inherent fragility of Kioxia's shareholder structure. Among all listed companies on the Tokyo Stock Exchange, Kioxia has the highest concentration of leveraged long positions, and once a negative catalyst appears, margin traders face pressure to sell involuntarily.

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Cailianshe statement: The content of this article is for reference only and does not constitute investment advice. Investors who act accordingly do so at their own risk.

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Kioxia shares plunge 17%, cautious guidance sparks concerns over AI memory super-cycle

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