Kioxia's Paradox: Record-Breaking Profits Meet a Market That Refuses to Cheer
Published on 08/07/2026 at 15:54 | Redaktion boerse-global.de
The arithmetic of Kioxia's current situation is almost absurd on its face. The Japanese memory-chip maker just delivered the strongest operating profit in its corporate history, announced a share buyback worth up to „800 billion, and unveiled a three-for-one stock split â yet investors keep heading for the exits. In European trading on Friday, the stock slipped another 2.54 percent to âŹ265.10, extending a monthly slide that now stands at roughly 35 percent.
A Quarter for the Record Books
The numbers themselves are staggering. Kioxia booked first-quarter revenue of „1.7671 trillion, a 415.5 percent jump year over year, while operating profit surged to „1.27 trillion from just „44.9 billion in the same period a year earlier. Net income came in at „842.2 billion. Data-center SSDs alone generated „1.1747 trillion in revenue, accounting for the lion's share of growth as hyperscale operators race to add storage capacity for AI workloads.
The blowout quarter also lifted the parent company. Toshiba reported a net profit of „4.4 trillion for the April-to-June period â 30 times the prior year's figure â with Jiji news agency explicitly crediting the sharp appreciation in Kioxia's share price as a key driver.
The NAND Pricing Question
At the heart of the market's unease lies a single variable: the trajectory of NAND flash memory prices. Kioxia said average selling prices rose roughly 70 percent year over year, while shipment volumes grew only in the low single digits. Management's guidance for the second fiscal quarter points to revenue of „2.39 trillion and operating profit of „1.9 trillion, with about 70 percent of that growth expected to come from continued price increases.
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The company is also working to lock in more of its supply through long-term agreements with key customers, aiming to cover roughly half of annual shipment volumes by 2028. Whether that pricing momentum holds â or whether the notoriously cyclical NAND market tips into a normalization phase â will likely determine whether the current valuation can be sustained.
A Sector-Wide Sell-Off
Kioxia is hardly alone in suffering the market's wrath. SanDisk and Western Digital both posted strong quarterly results recently, only to see their shares hammered â SanDisk fell 11 percent and Western Digital dropped 16 percent. SanDisk's data-center revenue grew 103 percent quarter over quarter to $2.98 billion, but its guidance of $10.3 billion to $10.8 billion for the coming quarter missed consensus. Jefferies analysts slashed their SanDisk price target from $3,000 to $1,750 while maintaining a buy rating; UBS trimmed its Western Digital target to $525. SK Hynix also slipped 6 percent in overseas trading.
The pattern is unmistakable: record fundamentals colliding with fears that the memory-chip cycle has peaked, and that current valuations already discount all future growth. In Tokyo on Friday, Kioxia shares fell 2.03 percent to „47,750, while the Nikkei 225 declined only modestly, weighed down by selling in chip and AI names.
The Bull Case
For optimists, the structural demand from AI and data centers remains compelling. The SSD & Storage segment already contributes more than 60 percent of group revenue, up 95.7 percent quarter over quarter. On the product front, Kioxia's GP1 series â featuring PCIe 6.0 connectivity and up to 10 million IOPS â took "Best of Show" honors at the FMS 2026 conference, and the company, together with SanDisk, reported a new record in QLC NAND bit density.
The balance sheet has also strengthened considerably. Kioxia now holds a net cash position, with an equity ratio improved to 51 percent following debt reduction. The buyback program â covering up to 30 million shares, roughly 5.5 percent of outstanding stock â runs through the end of October and could provide additional support. The stock split, effective October 1, is expected to make the shares more accessible to retail investors.
The Bear Case
Skeptics, however, have plenty of ammunition. The stock now trades 57.09 percent below its 52-week high, despite consistently record-setting financial results â a sign that expectations had run far ahead of reality and are now being unwound. Annualized volatility of 183.19 percent underscores just how jittery trading in the name has become.
There's also a legal overhang. In July, a jury in Texas found Kioxia liable for infringing a Viasat patent related to error correction in flash memory, awarding $229,025,021 in damages â approximately „37.1 billion. Kioxia has said it disagrees with the verdict and is exploring appeals, meaning the litigation is far from resolved.
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The deeper concern is structural: if NAND pricing momentum fades â whether from softening data-center demand or supply normalization â Kioxia's profit surge, which has been overwhelmingly price-driven, could reverse just as quickly as it materialized.
What to Watch
The coming weeks offer concrete milestones. The buyback runs through late October, and the stock split takes effect October 1 â both tests of whether management can cushion the share price with its own firepower. The next substantive checkpoint arrives with second-quarter results, when investors will see whether the company hits its „2.39 trillion revenue target.
For now, Kioxia finds itself in an unusual position: operationally, the business has never performed better; at the bourse, the question is no longer about the quality of results, but how long the cycle can keep running.
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