Stock Price Soars 12.36%! Is the NAND Super Cycle Confirmed? Storage Giant Kioxia’s Full-Year Profit Guidance Exceeds Consensus by 60%, Q3 Net Profit 87.81 Billion Yen

Japanese flash memory manufacturer Kioxia has released a full-year performance forecast that far exceeds market expectations, highlighting how AI-driven data center demand is reshaping the NAND flash market landscape.The company expects operating income and net profit to be about 35% to 60% higher than analysts’ forecasts.

This former Toshiba Group memory business is benefitting from the industrial transformation brought on by the AI boom. Kioxia expects fiscal year operating income to reach between 709.57 billion yen and 799.57 billion yen, far above the Bloomberg consensus of 525.47 billion yen. Net profit is expected to be between 453.76 billion yen and 513.76 billion yen, also significantly surpassing the market expectation of 320.75 billion yen. The net sales forecast range is 2.18 trillion yen to 2.27 trillion yen, above the market expectation of 2 trillion yen.

Although the actual third-quarter results were slightly below market expectations, the company emphasized that flash memory market demand is expanding due to AI applications, with continued growth in data center and enterprise server demand, while the PC and smartphone market also remains robust due to new AI model launches. The company stated that due to the substantial increase in data center demand,demand is expected to exceed supply.

This forecast shows that the NAND flash industry is undergoing a strong AI-driven recovery cycle. Kioxia also revealed that its balance sheet continues to improve, with the net debt-to-equity ratio dropping to 80% in the third quarter. At the same time, sales prices in all application sectors rose significantly in the fourth quarter, further boosting profit margins. The company’s share price has soared more than tenfold over the past year, doubled since the start of 2026, and achieved a remarkable reversal of fortune since its IPO in 2024.

Full-Year Forecast Highlights Industry Prosperity

In the third quarter, Kioxia achieved consolidated revenue of 543.6 billion yen, an increase of 95.3 billion yen from the previous quarter. This growth was mainly driven by higher average selling prices, increased shipments calculated by storage capacity, and positive currency exchange effects. However, operating profit for the quarter was 142.75 billion yen and net profit was 87.81 billion yen, slightly lower than the analysts’ previous estimates of 157.43 billion yen and 100.41 billion yen, respectively.

From a specific application perspective, the SSD and storage business performed strongly, achieving revenue of 300.4 billion yen, up 55.8 billion yen quarter-on-quarter. The smart device business recorded revenue of 186.3 billion yen, a quarterly increase of 29 billion yen. This further confirms the recovery trend in demand across various end markets.

Kioxia’s full-year guidance demonstrates strong confidence in the market outlook. The median operating income forecast is about 51% higher than the Bloomberg consensus, and the median net profit forecast exceeds market expectations by about 51%.This outperformance is mainly attributed to higher average selling prices, increased shipments based on storage capacity, and currency effects.

The company maintains its dividend forecast of 0.0 yen, indicating its priority to allocate funds to business expansion and balance sheet improvement. The net debt-to-equity ratio dropped to 80% in the third quarter, showing continued improvement in the financial position.

AI-driven Demand Exceeds Supply

Kioxia stated that in the flash memory market, server demand for data center and enterprise AI applications is expanding, while PC and smartphone demand also remains strong due to the launch of new AI models.The company emphasized that due to the substantial increase in data center demand, demand is expected to exceed supply.

This shift in supply and demand has brought pricing power to the NAND market. Kioxia stated that sales prices in all application areas rose significantly in the fourth quarter, further boosting profit margins. The expansion of AI-driven data center and enterprise demand is becoming the core growth engine for the NAND market, changing the previous oversupply market landscape.

Source: Wallstreet Insights