Shares of Japan's Kioxia, one of the largest makers of the NAND flash memory used everywhere from phones to data centers, fell sharply on the Tokyo stock exchange on Monday, November 2. The intraday loss reached between 15 and 17 percent; according to The Economic Times, the stock lost more than 13 percent and was the biggest drag on the Nikkei index.
What happened?
On Friday, Kioxia said it expects an operating profit of about 2 trillion yen ($12.7 billion) for the December quarter. The average analyst estimate was 2.35 trillion yen. For a company that earned 1.99 trillion yen in the September quarter, this means an almost flat picture after a run of rapid growth. Bernstein analysts called the forecast "a big miss".
The company attributes the weak outlook not to a drop in demand but to the timing of shipments. Some data center orders slipped into the next quarter, and a growing share of cheaper products for smartphones and computers is also weighing on average prices. Kioxia says its 2027 production capacity is already fully sold out and that more than half of its output for 2028 is also tied up in contracts.
The stock had risen more than 750 percent in the first half of this year on expectations of selling storage to AI data centers. The drop came right after a tough week for US tech stocks, even though Samsung and SK Hynix had reported record quarterly profits last week.
Why does it matter?
Memory chips have been one of the most profitable links in AI investment this year. The Kioxia case shows that investors now look not only at strong demand but also at the pace and durability of growth: falling even slightly short of expectations is enough to wipe out billions of dollars in value. We traced the path from the first hard disk, which weighed a ton, to today's chips in our article on the IBM 350 RAMAC.