rubicon59
Technology & Semiconductor Equity Commentary
Kioxia's next-12-month growth is likely to far surpass that of other major memory makers, yet it trades cheaper with no clear reason, possibly even below SK hynix's US ADR. @CeleritasRe notes it is doing a buyback and is probably the only name on the list that could credibly attract a takeover bid. x.com x.com
Kioxia is preferable to SanDisk because it offers much faster growth at a lower valuation. It is the fastest-growing memory name and, aside from SK hynix and Samsung, the cheapest. JPMorgan, per Wall St Engine, sees SanDisk uniquely placed for AI-driven NAND demand with long-term agreements lifting margins, but Kioxia offers more growth for less. x.com x.com x.com x.com
Kioxia is gaining NAND share as AI eats through storage, while Samsung and SK hynix shift resources to HBM. Staying focused on NAND has given it production costs 20-30% below competitors. Its quarterly operating profit hit $3.8B, passing Toyota as one of Japan's most profitable businesses, with about $15B of net income expected in 2027. Even after rising 2,000% in a year it trades at 8.9x forward earnings and is preparing a US listing. The key question is whether NAND pricing holds. x.com x.com
Kioxia's P/E and growth are about as good as investing gets, so anyone worried about holding it here simply owns too much. Fear around Chinese AI models looks misplaced: they cost just as much to serve as US models, which points to an even bigger compute shortage. Short term, momentum has turned and selling across the compute trade is likely to continue, but the plan is to ride it out; there is some risk, as always. x.com
Kioxia's 74% operating margin is a shortage premium with an expiration date set by its own investor deck. AI inference storage demand is real, but management's supply-demand chart shows NAND returning toward balance by late 2027, and its long-term model targets mid-20% operating margins. The stock is about 12x the annualized peak quarter but roughly triple that on the company's normalized plan. The bull case: hyperscaler contracts and the inference-storage tier keep margins structurally higher. … Show more
Sandisk's fast-growing data-center revenue strengthens its case among memory names with upside. Data-center revenue rose 61% quarter over quarter; revenue of $11.03B, adjusted EPS of $49.51 and adjusted gross margin of 85.1% all exceeded estimates. For upside among Micron, Sandisk and Kioxia, Micron ranks first, then Sandisk, then Kioxia, until further guidance. x.com x.com
Kioxia is very shareholder friendly at about 4x earnings, choosing to buy back stock rather than spend on capex. Per @jukan05, it plans to repurchase up to 30 million shares, 5.5% of shares outstanding, for up to ¥800 billion between August 3 and October 30, alongside April-September operating profit guidance of ¥3.16 trillion and a 3-for-1 split. A miss against expectations would matter more if the stock were still at ¥100,000 rather than near ¥49,000. x.com x.com
Kioxia's need to do a buyback is proof that the flash-memory boom is over. x.com
Kioxia looks cheap at about 5x next-twelve-month earnings as the NAND supercycle drives a massive profit surge. Q1 FY2026 revenue rose 415.5% year over year and net profit reached ¥842 billion versus ¥18 billion a year earlier, while the equity ratio climbed from 37.9% to 50.8%. First-half guidance implies Q2 EPS of about ¥2,322, up 51% on Q1; annualized, that is about ¥9,289 against a ¥46,000 share price. The open question is whether the cycle lasts or earnings peak sooner. x.com
Kioxia trades closer to 2x forward EPS once the cash it will generate is counted, despite eye-popping results. April-June revenue rose 415% and GAAP EPS 4,506% year over year; on sell-side estimates it trades at 3x next-twelve-month EPS, and that year's net income is about a third of its market cap. Even if this is peak earnings, they should stay strong for years, generating enough FCF to buy back 50-100% of the float. Five-year LTAs near record prices are a good business decision. x.com x.com … Show more
Samsung's and SK hynix's NAND franchises are threatened by YMTC, which should pass Kioxia first. YMTC's IPO filing shows an 84% gross margin on bare NAND die, above 70% on finished SSDs, as the shortage makes the low end the most profitable. It is #3 in shipments at 14%, level with Kioxia, and its RMB 33bn IPO funds capacity to pass Samsung and SK by end-2027 as they starve NAND capex for HBM. China's self-sufficiency push can speed its eSSD qualification; the shortage keeps margins fat for now. … Show more
Kioxia's absence from Robinhood filters out a cohort of boom-bust buyers and sellers. That is its most appealing feature here; it is the memory stock to add at these levels rather than Micron, SanDisk or SK hynix, despite reservations about its unsponsored ADR. x.com
