Kioxia Holdings' stock price has sharply declined by approximately 51% from its peak in June, shedding at least 29.5 trillion yen in market capitalization, following a period where AI-driven demand had pushed its year-to-date gains past 600%. This significant correction has led to increased downside risk, especially due to leveraged positions by Japanese retail investors. Despite this volatility, Nomura Securities has maintained a bullish outlook, reiterating a Buy rating and raising its target price to 126,000 yen (approximately $776) on July 16, citing improved NAND flash memory supply-demand dynamics and recovery in AI demand sentiment.
Nomura's optimistic assessment is supported by increases in its operating profit forecasts for Kioxia, from 7.0 trillion yen to 7.5 trillion yen for fiscal 2027 and a sharp increase for fiscal 2028. The brokerage also raised its quarter-over-quarter NAND bit price growth forecast for Kioxia in the April-June 2026 quarter from 65% to 70%, and for the July-September quarter from 20% to 25%. This contrasts with more conservative forecasts from other institutions like TrendForce, which had predicted weakening NAND bit prices.
Further validation for the positive outlook comes from Taiwanese memory module manufacturers; ADATA's SSD-related sales surged 87% quarter-over-quarter in the April-June 2026 period, and the company projects a 35% to 40% quarter-over-quarter increase in NAND flash contract prices for the July-September quarter. While the overall analyst community remains bullish, forecasting an average return of around 118% over the next year and anticipating substantial passive fund inflows from the October TOPIX index rebalancing, near-term market volatility risks persist.
