Kioxia shares fell as much as 15% in Tokyo on Monday after the Japanese memory chipmaker's profit forecast for the December quarter fell short of analyst expectations, rattling investors who had treated AI-driven memory demand as unstoppable.
The stock dropped from Friday's close of 13,470 yen to as low as 11,450 yen, its lowest level since May, after Kioxia said it expects operating profit of 2 trillion yen ($12.7 billion) for the three months ending in December. Analysts had expected about 2.4 trillion yen ($14.9 billion), and the company's US depositary receipts had already fallen 17% before Tokyo opened.
A record quarter was not enough
The selloff is striking because the quarter Kioxia just reported was the best in its history. Revenue reached 2.48 trillion yen and operating profit hit 1.9947 trillion yen for the September quarter, an operating margin of about 77% that the industry rarely sees. The company also announced its first dividend since listing.
But the guidance implied almost no growth from the September quarter, and that was enough to spook a market that had priced in acceleration. Kioxia makes NAND flash memory, the storage chip inside solid-state drives, phones and data-centre racks, and its fortunes have ridden the AI infrastructure buildout as data-centre operators load up on fast storage.
Timing, not demand, says the chief financial officer
Chief financial officer Yoshihiko Kawamura told investors that demand from AI data-centre operators remains robust and blamed the flat outlook on shipment timing: some orders were pulled into the September quarter, while others were pushed into the March quarter because enterprise storage products need longer lead times. He added that the company has already sold out its planned output for next year and signed long-term supply contracts with hyperscalers covering well over half of its expected 2028 shipments.
Not everyone in the room was convinced. Kenji Yasui, head of research at UBS Securities Japan, pressed management on how supply could be described as extremely tight for the next fiscal year while the price outlook was uncertain at the same time. The answer did not satisfy the market.
A warning sign for the AI trade
The drop landed in a nervous market. US tech stocks slid on Friday, with the Nasdaq down almost 3%, as investors questioned whether the hundreds of billions of dollars Amazon, Alphabet, Microsoft and Meta are pouring into data centres and chips will pay off. The four companies are on track to spend more than $700 billion on capital investment this year, much of it on AI infrastructure.
Kioxia's stumble does not prove the memory cycle has peaked — its own guidance points to slower price growth, not falling prices — but it shows how little room for disappointment remains after a year in which memory stocks soared. With Japanese markets closed on Tuesday for a public holiday, Monday's prices are the last word investors will get for a day, and the rest of the memory trade will be watching whether Kioxia's caution spreads.
