As Kioxia's stock price halved from its peak, Nomura Securities made a contrarian move—raising the target price to 1.26 million yen and reiterating a Buy rating. The core confidence stems from two catalysts: NAND bit price increases continue to exceed expectations, with ADATA's single-quarter SSD sales surging 87%, confirming tight supply and demand; the gloom of U.S. AI export controls is dissipating rapidly with the full opening of GPT-5.6.
While Kioxia's market capitalization has shrunk by half from its June peak, Nomura Securities has raised the target price for Kioxia Holdings against the trend, optimistic about the continued improvement in the supply-demand dynamics of NAND flash memory.
According to Zhui Feng Trading Desk, Nomura Securities released a research report on July 16, raising the target price for Kioxia Holdings from previous levels to 126,000 yen and reaffirming a Buy rating. The core rationale for this increase is: NAND flash bit prices continue to rise against a backdrop of supply shortages, exceeding previous market expectations. At the same time, concerns surrounding U.S. government restrictions on exports of cutting-edge AI models are gradually dissipating, helping to boost sentiment around AI-related demand.
Driven by the above assessment, Nomura also revised upward its profit forecasts for Kioxia Holdings—raising the operating profit forecast for fiscal year 2027 (ending March) from 7.0 trillion yen to 7.5 trillion yen, and the forecast for fiscal year 2028 from 9.8 trillion yen significantly to 10.7 trillion yen. The target price calculation is based on the free cash flow forecast for fiscal year 2028 (raised from 6.3 trillion yen to 6.9 trillion yen), using a 10x market capitalization/free cash flow ratio (equivalent to a 9.0x P/E ratio based on the fiscal year 2028 EPS forecast).
It is worth noting that investors are increasingly concerned that the AI-driven industry rally has become excessive. In early trading in Tokyo on Friday, Kioxia's stock price once plummeted 14%, down 51% from last month's high, with market capitalization evaporating by at least 29.5 trillion yen. Previously, driven by the AI boom, market demand for memory and data storage surged, with Kioxia's stock price soaring over 600% year-to-date by mid-June. Analysts remain optimistic about Kioxia, forecasting a return of about 118% over the next year. Additionally, the expected adjustment of the TOPIX index in October is anticipated to bring large-scale passive fund inflows. However, if the decline intensifies, leveraged positions held by Japanese retail investors could expose Kioxia to further downside risks.
Bit Price Increases Exceed Expectations, Supply Shortage is the Core Driver
Nomura raised its forecast for Kioxia Holdings' bit price growth rate for the April-June quarter of 2026 from a quarter-on-quarter increase of +65% to +70%, and for the July-September quarter from +20% to +25%.
It is worth noting that this assessment diverges from the expectations of some market institutions. Research firm TrendForce previously estimated that, affected by slowing consumer electronics demand, NAND bit prices in April-June 2026 would be weaker than at the end of March. However, Nomura cited the latest statements from Taiwanese memory module manufacturers, believing that bit prices are actually still on an upward trajectory.
The report pointed out that ADATA's SSD-related sales are highly correlated with Kioxia Holdings' performance, with the company's SSD-related sales in April-June 2026 surging 87% quarter-on-quarter. ADATA management also stated that they expect NAND flash contract prices to rise 35% to 40% quarter-on-quarter in the July-September quarter. The above data provides important evidence supporting Nomura's optimistic assessment.
AI Export Restriction Concerns Ease, Sentiment Pressure Tends to Subside
The report also addressed recent changes in market sentiment surrounding U.S. government AI export control policies.
A previous industry report released on June 16, 2026, noted that U.S. government restrictions on the export of cutting-edge AI models were a significant event affecting AI-related sentiment. OpenAI's latest GPT-5.6 series, released in stages on June 26 in compliance with U.S. government requirements—initially available only to specific trusted users—had a certain negative impact on AI-related market sentiment.
However, with continuous improvements in related news since early July and OpenAI's full public release of the GPT-5.6 series on July 9, market sentiment has begun to show signs of recovery. This shift helps alleviate the uncertainty that previously suppressed AI-related demand expectations, providing positive support for the demand outlook of NAND flash suppliers like Kioxia Holdings.
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