Kioxia's stock has more than halved in about a month, yet the majority of analysts have chosen to stand pat, with some even raising their price targets. Their rationale is straightforward: the fundamentals remain unchanged; the decline is driven by sentiment and technical factors.
Kioxia Holdings closed at 52,110 yen (approximately $320) on Friday, marking a decline of over 50% from the all-time high reached about a month ago. Concurrently, according to Bloomberg data from July 21, analysts' average price target for the stock is 121,959 yen, representing a potential upside of roughly 130% from the current share price.
This discrepancy ranks first among the top 100 companies by market capitalization on the Tokyo Stock Exchange, far exceeding the 63% gap held by the second-ranked company, Fujikura Ltd..
What's Behind the Bullish Resilience?
This recent downturn is not an isolated incident. Global AI and semiconductor stocks have faced widespread pressure in recent weeks, and Kioxia has not been immune.
Specifically, two forces have been at play: first, market concerns over the sustainability of AI-related capital expenditure, coupled with expectations that competitor expansion could depress memory chip prices; second, technical selling pressure, particularly spillover selling from leveraged single-stock ETFs in South Korea.
However, in the face of a 50% share price plunge, the prevailing attitude among most analysts is that this represents noise, not a signal.
Kazuyoshi Saito, a senior analyst at IwaiCosmo Securities in Japan, maintains a price target of 132,000 yen. He stated plainly, "The fundamentals have not changed at all. The company's strong earnings and growth narrative, underpinned by AI demand, remains solid."
He further noted, "Once supply-demand distortions like the South Korean ETFs subside, positive catalysts such as robust earnings will drive a share price recovery."
Nomura Securities raised its target price for Kioxia from 115,000 yen to 126,000 yen last Thursday. Analyst Virginia Wang wrote in a report that NAND flash memory prices could continue to rise due to supply shortages.
Yoshiharu Izumi, a senior analyst at Phillip Securities Japan, similarly maintains a 143,000 yen target. He believes, "The recent weakness has been primarily driven by technical factors, including selling from overseas ETFs and leveraged bets by Japanese retail investors."
When to Expect a Rebound?
Nevertheless, some voices caution that while the bullish thesis holds, a rebound is unlikely to be immediate.
Ikuo Mitsui, a fund manager at Aizawa Securities in Japan, suggests that disruptions from factors like South Korean ETF fund flows mean Kioxia may not regain upward momentum until at least the end of August. "Many investors will no longer concentrate their holdings in Kioxia but are more likely to diversify into other attractively valued stocks," he said.
In other words, even if the bullish logic is sound, the return of capital will take time.
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