At a time when Kioxia's market value has halved from its June peak, Nomura Securities has bucked the trend by raising its price target for Kioxia Holdings, expressing optimism about the continued improvement in the supply-demand dynamics for NAND flash memory.
According to market reports, Nomura Securities issued a research report on July 16, raising its price target for Kioxia Holdings to 126,000 yen from its previous level and reiterating a Buy rating. The core rationale for this upward revision is that the per-bit price of NAND flash memory continues to rise against a backdrop of supply shortages, exceeding prior market expectations. Concurrently, concerns surrounding U.S. government restrictions on the export of advanced AI models are gradually dissipating, which is helping to boost sentiment around AI-related demand.
Driven by these assessments, Nomura also revised upward its profit forecasts for Kioxia Holdings—raising its operating profit forecast for the fiscal year ending March 2027 from 7.0 trillion yen to 7.5 trillion yen, and significantly increasing its forecast for fiscal year 2028 from 9.8 trillion yen to 10.7 trillion yen. The price target calculation is based on the forecast for free cash flow in fiscal 2028 (raised from 6.3 trillion yen to 6.9 trillion yen), applying a 10x market capitalization-to-free cash flow ratio (equivalent to 9.0 times the forecasted earnings per share for fiscal 2028).
Per-Bit Price Increase Exceeds Expectations, Driven by Supply Shortages
Nomura raised its forecast for the sequential growth rate of Kioxia Holdings' per-bit price for the April-June quarter of 2026 from +65% to +70%, and its forecast for the July-September quarter from +20% to +25%.
It is noteworthy that this view diverges from the expectations of some other market institutions. Research firm TrendForce had previously anticipated that NAND per-bit prices in April-June 2026 would be weaker than at the end of March, influenced by a slowdown in consumer electronics demand. However, Nomura cited recent statements from Taiwanese memory module manufacturers, arguing that per-bit prices are in fact maintaining an upward trajectory.
The report pointed out that ADATA's SSD-related sales are highly correlated with the performance of Kioxia Holdings, with the company's SSD-related sales for April-June 2026 surging 87% sequentially. ADATA management also stated that it expects NAND flash contract prices to rise by 35% to 40% sequentially in the July-September quarter. This data provides significant corroboration for Nomura's optimistic outlook.
Concerns Over AI Export Restrictions Ease, Sentiment Pressure Subsides
The report also addressed recent shifts in market sentiment concerning U.S. government policies on AI export controls.
A previous industry report dated June 16, 2026, had highlighted that U.S. government restrictions on the export of advanced AI models were a significant event affecting AI-related sentiment. The staged release of OpenAI's latest GPT-5.6 series on June 26, made available only to specific trusted users in compliance with U.S. government requirements, had a somewhat negative impact on AI-related market sentiment.
However, sentiment has begun to show signs of recovery since early July, following a sustained improvement in related news flow and OpenAI's full public release of the GPT-5.6 series on July 9. This shift helps alleviate the uncertainty that had previously weighed on AI-related demand expectations, providing positive support for the demand outlook of NAND flash suppliers like Kioxia Holdings.
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