Major Wall Street firms are sharply increasing their price targets for Kioxia Holdings Corp. after the Japanese memory-chip maker issued a stronger-than-expected outlook, News.Az reports, citing Bloomberg.
Citigroup Global Markets Japan Inc., JPMorgan Securities and Morgan Stanley MUFG Securities Co. all moved quickly to raise their targets after Kioxia’s earnings report on Friday showed a surge in profit.
Morgan Stanley named the company its top pick, citing expectations that growth in real-world AI applications will continue, along with Kioxia’s strong free cash flow and potential for shareholder returns.
The upgrades come even after Kioxia’s shares soared nearly 2,000% over the past year, fueled by demand linked to the global AI data center expansion, making the company the world’s best-performing major stock this year. The stock was untraded amid a flood of buy orders on Monday and was on track to rise by 16%, its daily limit.
On average, analysts’ price targets for Kioxia climbed about 44% to ¥63,843 ($402) as of Monday, up from just over ¥44,000 before the earnings announcement. That represents the largest post-results increase among companies listed on the Nikkei 225 Stock Average and would imply a gain of more than 40% from Friday’s closing price.
The former Toshiba Corp. chip unit has traditionally focused on NAND, the high-speed storage technology that replaced hard drives in devices ranging from laptops to large-scale data centers.
While South Korean competitors also produce DRAM, which serves a similar purpose, they have recently shifted more resources toward high-bandwidth memory, allowing Kioxia to capture a larger number of orders in the NAND market.