Kioxia, a major semiconductor company, reported strong interim revenue and profit growth, but its third-quarter outlook fell below market expectations, sending the share price sharply lower. Related stocks Advantest and Tokyo Electron were also weak, while the impact of US-China developments and political events was also discussed. DAIBOUCHOU, whose assets exceed ¥1 billion, discusses the outlook.
Kioxia Holdings reported interim revenue of ¥4.2472 trillion, operating profit of ¥3.2647 trillion and net profit of ¥2.1979 trillion, all substantially higher than the previous year, against the backdrop of the AI boom. However, its October–December outlook was below market expectations and was projected to be broadly flat from the previous quarter.
Kioxia’s share price plunged following the earnings announcement, falling below ¥10,000. High-market-cap stocks including Advantest and Tokyo Electron were also sold, while earnings results from Intel, Amazon and Anthropic in the US, along with the outcome of the US midterm elections, weighed on sentiment in Japan’s equity market.
The change in index weightings raised Kioxia’s free-float ratio in TOPIX, increasing the stock’s liquidity while also raising the risk of heavy selling when the stock comes under pressure. The view was expressed that semiconductor stocks tend to reach their earnings peak before their share-price peak, and that care is needed to avoid overbuying them on positive news.
DAIBOUCHOU said that investment in volatile AI and semiconductor stocks is a matter of individual choice, while noting that he continues to monitor semiconductor-related stocks. He said it would be important going forward to assess earnings trends and the overall market climate.