Kioxia Shares Rebound Sharply Ahead of Earnings, but Structural Fears Linger
Published on 07/30/2026 at 18:41 | Redaktion boerse-global.de
The wildest week of the year for Kioxia shareholders reached another fever pitch on Thursday, when the Japanese memory-chip maker's stock surged 22.97 percent to €257.00 — a dramatic reversal just 24 hours before the company is set to report quarterly results. The rally comes after a brutal stretch that saw the shares hit a daily limit low earlier in the week, leaving the stock down 58.62 percent from its 52-week high of €621.00, reached on June 22, 2026.
The rebound unfolded against a fractured backdrop in Asian chip markets. While SK Hynix shed over 5 percent on Wednesday and Samsung edged nearly 1 percent lower, Kioxia managed to climb almost 3 percent in Tokyo trading. The euro-denominated move was even more pronounced. Still, with a relative strength index of 39.7, the stock has yet to establish a convincing floor — a technical signal that investors remain cautious despite the bounce.
A Paradox of Record Profits and Falling Share Prices
The disconnect between Kioxia's price action and the blockbuster earnings reported by its larger rivals has become the central puzzle for investors. SK Hynix posted second-quarter revenue of 79.3 trillion won on Wednesday, with operating profit soaring 557.2 percent year-on-year to 60.5 trillion won. Yet the stock fell 8.98 percent in regular trading, suggesting the market doubts whether such margins are sustainable.
Samsung Electronics one-upped its Korean competitor on Thursday, reporting operating profit of 89.49 trillion won for the second quarter of 2026 — an eye-popping 1,813.8 percent increase from a year earlier and the company's third consecutive record quarter. That puts Samsung at the top of the global semiconductor industry in quarterly earnings. Despite the milestone, Samsung's shares also struggled to hold gains.
Should investors sell immediately? Or is it worth buying Kioxia?
For Kioxia, the initial reaction to the SK Hynix numbers was telling. The stock spiked as much as 9.58 percent on Wednesday before reversing sharply to close more than 10 percent lower. The whipsaw pattern points to a strong tendency among investors to use good news as an exit opportunity — a dynamic that has kept the stock under pressure even as the broader memory sector reports historic profits.
Earnings Day: What to Watch Beyond the Numbers
Kioxia will release its fiscal first-quarter 2026 results on Friday, July 31. When the company issued guidance in May, management struck an optimistic tone, forecasting revenue of ÂĄ1.75 trillion, operating profit of ÂĄ1.298 trillion, and net income of ÂĄ869 billion. Those figures would have a single quarter exceed the profit of the entire previous fiscal year.
Analysts, however, caution that merely hitting those targets may not be enough to reverse the downtrend. Goldman Sachs, which raised its price target to ¥116,000 in late June, expects operating profit of ¥1.417 trillion. Citi is projecting ¥1.40 trillion and has set a target of ¥140,000. But with the stock trading at roughly €257 — equivalent to well below those yen-denominated targets — the market is clearly pricing in downside risk.
The real focus, many market participants say, will be on management's commentary around pricing discipline, capacity expansion, and capital allocation. Speculation has been building that Kioxia could announce share buybacks or dividends to stabilize the stock, though no confirmation has emerged. The earnings call on Friday is seen as a critical moment for management to address those expectations head-on.
Capacity Glut Fears and Chinese Competition
Even as the current earnings cycle dazzles, structural concerns are casting a long shadow. Samsung, SK Hynix, and Kioxia have all ramped up capacity aggressively over the past two years, with new fabrication lines for high-end NAND memory gradually coming online. Market researcher TrendForce expects supply growth to outpace demand by the second half of 2027.
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Adding to the pressure, Chinese manufacturing partner YMTC has completed its third expansion phase and is now sourcing more than half of its equipment domestically — a record for the company. The recent initial public offering of Chinese rival CXMT in Shanghai has also stoked worries about intensifying competition and potential oversupply in both NAND and DRAM markets.
Since its debut on the Tokyo Stock Exchange in December 2024, Kioxia has transformed from what some described as the "frugal survivor" of the Toshiba era into one of Japan's most volatile large-cap stocks. The annual performance remains strongly positive at plus 260.34 percent, but the current selloff — which has erased roughly 59 percent of the stock's value in just 30 days — underscores how cyclical the memory business remains and how quickly sentiment can shift toward richly valued AI plays.
Friday's report will determine whether the latest rebound has legs. If management reaffirms pricing discipline and offers concrete signals on share buybacks, that could carry more weight than the earnings figures themselves. Without such signals, the recent gains risk evaporating as quickly as they appeared.
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