Kioxia's stock closed 5.6% higher following the release of its quarterly earnings, which showed an impressive operating profit of 1.27 trillion yen ($8.11 billion) for the April-June quarter, a substantial increase from 44.9 billion yen a year earlier.
Revenue surged more than fivefold to 1.77 trillion yen, bolstered by increased bit shipments, a weaker yen, and heightened demand from AI-focused data centers. Despite a recent 40% drop in share price, analysts believe the selloff was overdone, citing Kioxia's competitive advantages and strong fundamentals.
Richard Kaye from Comgest noted that forced selling by a hedge fund had contributed to volatility, but this negative pressure seems to have eased. Morningstar's Jing Jie Yu echoed this sentiment, emphasizing that near-term fundamentals remain strong.
Kioxia's planned share buyback of up to 800 billion yen is viewed positively by analysts, as it signals confidence in the company's valuation without affecting future dividends.
Overall, Kioxia's outlook remains promising, with expectations of growth in both bit shipment volumes and prices, despite concerns about sustainability in AI spending and competitive pressures from companies like TSMC and SK Hynix