Kioxia crashes, Seagate plunges, and the "hottest" U.S. storage stocks slump across the board.

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The Japanese storage chip giant Kioxia’s explosive earnings miss triggered a chain reaction in the US memory sector. On Thursday, Kioxia Holdings announced its adjusted net profit for the second fiscal quarter plummeted over 60% year-on-year, dragging down the stock prices of American peers Western Digital, Seagate Technology, and Micron Technology—all taking a sharp hit and casting a shadow over what has been the strongest-performing tech sector this year.

Kioxia’s net profit for the quarter was only 41.7 billion yen (approximately $284 million USD), a steep drop from the same period last year. The company faces dual pressures of falling revenues and rising costs; this performance has sparked concern in the market about the overall health of the storage industry.

During Thursday’s Tokyo trading session, Kioxia’s share price fell by 1.62%, subsequently impacting its overseas peers: Seagate’s stock dropped 7.31%, Western Digital fell 5.29%, and Micron Technology lost 3.25%. These companies have all seen triple-digit gains year-to-date, with Western Digital’s climb reaching 269% as of Wednesday’s close, topping the S&P 500’s annual gain list, while Seagate and Micron ranked third and fourth, respectively.

Market perspectives suggest Kioxia’s weak performance may stem from a fixed price agreement for supplying mobile NAND chips to Apple. Amid sharply rising spot prices, this pricing mechanism has prevented Kioxia from benefiting from favorable market trends, making it a unique case within the industry.

Kioxia’s earnings miss sparks concerns about AI-driven boom in the storage market

The data and memory hardware industry experienced robust growth in 2025, driven by a surge in demand from artificial intelligence and cloud computing investments. Western Digital, Seagate, and Micron have each posted triple-digit percentage gains this year, making this one of the best-performing sectors in the US stock market.

Compared to these stocks’ massive gains this year, Thursday’s pullback was relatively modest, suggesting Wall Street does not yet have serious concerns about the industry outlook. Investors must determine whether Kioxia’s earnings miss is an isolated case or a sign of broader industry troubles.

Apple supply agreement becomes a drag

According to market opinion, Kioxia’s lackluster performance may be due to its supply agreement with Apple. The company has been providing mobile NAND chips to Apple at pre-set prices, while spot market prices have surged. This fixed pricing structure has prevented Kioxia from enjoying the price premium brought by industry momentum.

Western Digital and Seagate both exceeded market expectations in their latest financial reports. Micron will announce its results for the November fiscal quarter next month, which will further validate the overall industry demand situation.

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