Kioxia stock falls almost 16% after a record quarter and a flat outlook

The photos on your phone, the files on your laptop and the data an AI chatbot reads all sit on the same kind of chip: flash memory. One of the world’s biggest makers of it just had the best quarter in its history. On Monday, Kioxia shares fell almost 16%.

Kioxia stock closed down 15.78% at ¥11,345 in Tokyo on 2 November, its lowest price since May. The trigger was good news that was not as good as investors had hoped.

A record ¥2.48 trillion quarter, and a guide only 1% higher

Kioxia, Japan’s biggest flash-memory maker, published its earnings on Friday, 30 October. The company’s own figures show:

• Six months to 30 September: revenue of ¥4.25 trillion, up 437% on a year earlier. Profit for shareholders was about ¥2.2 trillion, against ¥59 billion a year before.
• July to September alone: about ¥2.48 trillion in revenue, more than five times the same quarter last year, and above the company’s own forecast.
• October to December outlook: about ¥2.5 trillion in revenue and about ¥2.0 trillion in adjusted operating profit. Both are only about 1% above the quarter just reported.
• A first dividend: ¥90 a share before the 3-for-1 share split of 1 October, which is ¥30 a share today.

Analysts had pencilled in far more growth. BigGo Finance put the guide about 15% below the market’s average estimate for operating profit. Bloomberg described the outlook as demand levelling off.

Why AI made flash memory so valuable, so fast

Flash memory keeps your data when the power is off. It sits inside phones, laptops and the large storage drives, called SSDs, that fill data centres. AI needs huge amounts of it: models are trained on vast collections of text and images, and every answer they give draws on stored data.

As tech giants raced to build AI data centres, they bought all the flash they could find. Prices and profits rose steeply. Kioxia’s results show how steep: adjusted operating margins of around 80% in the latest quarter, by our reading of its filings, are rare for any manufacturer.

Why Kioxia stock fell after a record profit

Share prices move on what investors expect next, not on last quarter. When a company has grown fivefold, investors price in more growth. A flat forecast, even at record levels, looks like the climb is slowing.

Timing played a part too. On Friday, US chip stocks fell sharply after results from Intel and Amazon; Intel had warned of a softer quarter ahead, as our Intel results story explains. Kazuaki Shimada, chief strategist at IwaiCosmo Securities, told Reuters that Wall Street’s fall and Kioxia’s earnings weighed on Tokyo shares.

Not every memory maker fell. In Seoul, SK hynix rose 4.51% and Samsung Electronics rose 1.78% on the same day. Both make HBM, a special fast memory that sits right next to AI chips, and both reported record quarters last week: SK hynix expects the memory shortage to last until 2030, while Samsung’s AI memory carried a quarter in which its phones lost money. Memory chip stocks are not one trade.

If you buy phones, laptops or storage, a pause is not a price cut

For most of us, flash memory shows up in the price of a phone with more storage, a laptop SSD or a cloud plan. A flat forecast from Kioxia does not mean NAND prices are falling. It suggests they may be rising more slowly. We would not wait for cheaper storage on the strength of this news alone.

If you follow markets, this is not investment advice, and we make no forecast for the share price.

On balance, a slowdown in growth, not in demand

There is real good news here. Kioxia earned more in one quarter than in many past years, declared its first dividend, and still expects to grow. Data centres keep buying.

The concern is also real. When a company guides for almost no growth after a run like this, it is fair to ask whether flash memory is near the top of its cycle. Memory has always moved in booms and slumps.

On balance, our reading is that this looks more like a plateau than a fall. The likelier story is a market adjusting its hopes, not a business in trouble. But one cautious quarter does not settle it either way.

The next test is the next Kioxia earnings report, for October to December, due early in 2027. If demand from AI data centres holds, Monday may look like a pause. If not, it will look like the first sign of the turn.