Kioxia’s cautious guidance for the December quarter shook memory stocks and raised a question the entire industry is now grappling with: Does the subdued guidance from Japan’s largest chipmaker signal a cooling of the AI memory cycle, or the sales noise ahead of March…
A conservative forecast from Kioxia Holdings, Japan’s largest memory chip maker, produced an overnight gain. Micron technology (NASDAQ: MU | MU Price Prediction) in a loss and sent memory stocks lower. Micron stock is at $853.34, down 4% this afternoon. The drop comes on top of a pullback from an AI-powered rally in the chipmaker’s shares.
Over the past month, Micron stock is down 20%. This decline comes despite record results: On September 30, the company reported revenue of $54.23 billion for the fourth quarter of fiscal 2026, up 379.3% year-over-year, with an adjusted gross margin of 87%. For the first quarter of fiscal 2027, Micron expects revenue of $61.5 billion, give or take $1.5 billion.
Kioxia’s soft guidance drives down memory stocks
Kioxia Holdings guided its December quarter operating profit to 2 trillion yen, the company announced on November 2. This forecast is only slightly higher than the 1.99 trillion yen Kioxia earned in the September quarter, and it is lower than analysts’ estimates. Kioxia shares fell in Tokyo as investors digested the outlook.
The company attributed the poor outlook primarily to the timing of shipments, saying some orders were postponed to the September quarter while others were pushed to the March quarter. Chief Financial Officer Yoshihiko Kawamura said Kioxia expects a return to rapid growth in the March quarter. He added that demand for AI data centers remains robust and that Kioxia has sold its planned production for next year.
Micron’s decline also follows a weak previous session on October 30, when Samsung missed earnings expectations. The open question for the group is whether Kioxia’s outlook indicates a slowdown in demand and pricing for AI memory, or whether the sale reflects broader technology positioning.
How Western Digital and SanDisk Compare to Micron
Western digital (NASDAQ: WDC) stock is at $347.24, down 5%. That’s a steeper decline than Micron’s, making the hard drive maker the weakest of the three. Over the past month, Western Digital has lost 24%. The company sells to hyperscalers, cloud service providers and companies developing storage for the AI-driven data economy.
SanDisk (NASDAQ:SNDK) stock is at $1,114.65, down 3%. The flash maker falls less than Micron, which runs counter to the idea that Kioxia’s manufacturing partner would be hit the hardest. Over the past month, SanDisk has fallen 36%, the biggest drop of the group, and was lower in the previous session despite upbeat results announced on October 29.
Why Micron’s business model differs from its storage peers
Micron manufactures dynamic random access memory (DRAM) as well as NAND and NOR flash, including high bandwidth memory (HBM) for AI systems. The company’s strategic customer agreements are designed to ensure long-term demand visibility, particularly for AI workloads. This mix connects Micron to both major memory markets at once.
Western Digital now operates as a hard drive company after spinning off its Flash business into SanDisk, and retains a stake in SanDisk. SanDisk, on the other hand, designs and manufactures NAND flash drives and SSDs, producing wafers through Flash Ventures, its joint venture with Kioxia. This arrangement ties SanDisk more directly to Kioxia’s production, while Micron’s exposure to DRAM gives it pricing factors that its NAND-focused peers don’t share.
Micron’s next test is whether AI memory pricing holds
Micron’s next earnings report will show whether the price momentum holds. On the Sept. 30 call, President and COO Manish Bhatia said Micron did not have “visibility on when supply and demand would balance.” The company also said it had “more than 75% of our shipments committed for the year.” Kioxia’s comments on order timing and sold-out production support this view.
Skeptics see a cycle nearing its peak. The average analyst revenue estimate for Micron’s fiscal year ending August 2027 is $275.5 billion, a high bar. Citrini Research analyst Jukan read the sale of Lumentum Fund (NASDAQ:LITE) at Marvell Technology (NASDAQ:MRVL) as a sign that management expects the AI cycle to “collapse in two to three years,” a view that remains an analyst’s opinion.
A further period of weakness for the memory group could worsen Micron’s monthly losses, while a pricing update matching Kioxia’s upbeat comments in March could ease the pressure. A cautious approach may make sense until the memory demand debate is resolved.
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