MU, SNDK, DRAM Inch Higher Overnight After Mixed Week: Japan’s Kioxia Plunges After Cautious Memory Outlook

• SanDisk suffered its worst fall in three months on Friday despite posting upbeat results.
• Earlier in the week, Samsung missed profit expectations, while Intel’s December-quarter guidance disappointed, adding pressure on chip stocks.
• Tokyo-based Kioxia’s operating profit forecast missed expectations, causing the stock to crash 15% on Monday. 

Memory stocks rose modestly late Sunday after a challenging week, with mixed quarterly reports from Intel (INTC) and Samsung.

Notably, Kioxia Holdings, Japan’s largest memory chipmaker and a competitor to Samsung, Micron, and SK Hynix, issued a weak forecast late Friday, sending its shares down 15% at Monday’s open in Tokyo. 

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Micron (MU) and SanDisk (SNDK) stocks rose about 2.4% each in overnight trading, while The Roundhill Memory ETF (DRAM) advanced 2.7%. SNDK fell 7% over the past week, while DRAM and MU eked out marginal gains.

At the tail-end of the week, SanDisk reported upbeat first-quarter numbers and issued a better-than-expected forecast. However, its shares fell 13.5% on Friday, the stock’s steepest fall in three months. At least five analysts lowered their price targets.

Earlier in the week, Samsung missed profit expectations, while Intel’s December-quarter guidance disappointed, adding to the list of factors weighing on investor sentiment toward chip stocks. 

Kioxia's Report

Tokyo-based Kioxia said it expects operating profit of 2 trillion yen ($12.7 billion) for the December quarter, falling short of analyst estimates and indicating only scant growth from the September period, when it recorded 1.99 trillion yen, according to Bloomberg. 

Kioxia’s operating profit had been rising sharply for the past several quarters as AI data center operators increasingly load up on fast NAND storage.

The company reportedly attributed its lackluster momentum largely to the timing of shipments rather than a deterioration in demand. Some orders originally scheduled for the current quarter were brought forward into the September period due to customer requests, while others have been pushed into the March quarter.

CFO Yoshihiko Kawamura said that Kioxia expects to return to rapid growth in the March quarter and that demand from AI data center operators remains robust. The company has already sold out its planned output for next year.

Retail View On Memory Stocks

On Stocktwits, the retail sentiment was ‘bearish’ for MU and ‘extremely bullish’ for SNDK. The sentiment was ‘neutral’ for DRAM.

“$DRAM this is a buying opportunity for any good stocks. You might wanna hold because after November 6 after midterm elections I’m almost certain the stock market is gonna start rising again,” said a trader.

On the MU stream, a trader speculated that Micron could announce a stock split at its upcoming earnings report, similar to SanDisk’s move this week.

“Next ER will be a big surprise and also, I won't be surprised for a 1:5 stock split. An easy $1,600 with $320 after 1:5 split, let's see,” they said.

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