Nomura raises target price for Kioxia against the market trend! Nomura: NAND flash prices will continue to rise.

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As Kioxia’s market value shrinks by half from its June peak, Nomura Securities has bucked the trend by raising its target price for Kioxia Holdings, expressing optimism about the continued improvement in the supply-demand dynamics of NAND flash memory.

According to Chasing Wind Trading Desk, Nomura Securities released a research report on July 16, raising the target price for Kioxia Holdings to 126,000 yen from its previous level, and reaffirmed its Buy rating. The core rationale for this upgrade is: NAND flash bit prices are continuing to rise amid supply shortages, exceeding market expectations. At the same time, concerns around U.S. government restrictions on cutting-edge AI model exports are gradually dissipating, which helps boost sentiment for AI-related demand.

Driven by these assessments, Nomura simultaneously raised its profit forecast for Kioxia Holdings—upping its operating profit estimate for fiscal 2027 (ending March) from 7.0 trillion yen to 7.5 trillion yen, and for fiscal 2028, from 9.8 trillion yen to 10.7 trillion yen. The target price calculation is based on the fiscal 2028 free cash flow estimate (raised from 6.3 trillion yen to 6.9 trillion yen), using a 10-times market value/free cash flow ratio (equivalent to 9.0 times the EPS forecast for fiscal 2028).

Bit price increases exceed expectations; supply shortage is key driver

Kioxia Holdings’ bit price forecast for the April–June 2026 quarter has been raised from a quarter-on-quarter growth of +65% to +70%, and for the July–September quarter from +20% to +25%.

It’s worth noting that this view diverges from some market institutions’ expectations. Research firm TrendForce previously anticipated that due to softening consumer electronics demand, NAND bit prices for the April–June 2026 period would be weaker than at the end of March. However, Nomura cites recent statements from Taiwanese memory module manufacturers, believing that bit prices are actually still on an upward trajectory.

The report points out that ADATA’s SSD-related sales are highly correlated with Kioxia Holdings’ performance, and the company saw SSD-related sales surge 87% quarter-on-quarter for the April–June 2026 period. ADATA’s management also indicated they expect NAND flash contract prices to increase 35%–40% quarter-on-quarter in the July–September quarter. These data lend strong support to Nomura’s optimistic judgment.

Concerns about AI export restrictions ease; sentiment pressure fading

The report also focuses on recent market sentiment changes around U.S. government AI export control policies.

A previous industry report released on June 16, 2026 had noted that U.S. government restrictions on cutting-edge AI model exports were a significant factor impacting AI-related sentiment. OpenAI’s latest GPT-5.6 series was released in stages on June 26, according to U.S. government requirements, only accessible to designated trusted users, which caused some negative impact on AI-related market sentiment.

However, with continued improvement in related news flows since the beginning of July, and OpenAI’s full public rollout of the GPT-5.6 series on July 9, market sentiment has begun to warm up. This shift helps mitigate the uncertainty that had been suppressing expectations for AI-related demand and provides positive support for demand prospects of NAND flash suppliers such as Kioxia Holdings.

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The above content is from Chasing Wind Trading Desk.

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