Kioxia Could Plan Dividends And Buybacks After Stock’s 65% Plunge

What Happened

A broader selloff in AI-related stocks spread across global markets in July. Investors grew wary of crowded positioning and fading momentum in the AI trade. Chinese NAND manufacturers also ramped up capacity, raising fears that Kioxia’s pricing power would not last.

Analysts say the decline now puts shares at a level where a buyback becomes easier to justify. That move would work alongside the dividend plan management unveiled at its June investor day.

Kim added that stronger shareholder returns could become a genuine catalyst, one that could draw value investors alongside the growth investors and hedge funds already in the stock.

Kioxia reports fiscal first-quarter results on Friday. Investors will watch for clarity on the dividend timeline. They also want to know whether buybacks move from possibility to formal policy.

Market Context

The selloff has erased roughly $245 billion in market value since Kioxia’s June 22 high. The stock briefly ranked as Japan’s most valuable company just before the slide began.

By June 22, the stock hit an all-time high of ¥112,700. Kioxia’s market capitalization briefly overtook Toyota Motor, making it Japan’s most valuable listed company.

Kioxia’s cash generation also gives it room to act. SK Kim, an analyst at Daiwa Securities Capital Markets Korea, pointed to long-term supply agreements and steady data center demand. Both factors support free cash flow, he said.

Why It Matters

Buybacks Could Signal Confidence

Kioxia said in May that dividends remain its priority. Still, management left room for a flexible response, including share buybacks, depending on circumstances. A company spokesperson said Kioxia continues to weigh buybacks but has not made a concrete decision yet.

“A buyback could send a signal that management views the stock as oversold.”

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Details

Kioxia Holdings Corp. shares have crashed 65% from their June peak. The drop is now fueling speculation that the Japanese memory chipmaker will speed up dividend payouts and share buybacks.

From Boom to Bust

Kioxia listed on the Tokyo Stock Exchange in December 2024 with momentum building through 2025, as data centers raced to secure NAND flash memory for the AI buildout. Shares surged more than 500% that year alone. The rally kept accelerating into 2026 as tight memory supply pushed Kioxia’s profits sharply higher.

The stock fell alongside South Korean peers SK Hynix and Samsung. Both posted double-digit declines the same week Kioxia’s rout deepened.

Ikuo Mitsui, a fund manager at Aizawa Securities, said the reasoning behind a repurchase would matter as much as the move itself.

— Ikuo Mitsui, Bloomberg

The slide follows a broader chip rout tied to AI trade selloff fears, a trend that also drove Kioxia’s 45% stock crash last month. Rising competition from Chinese rivals has added to the pressure. The same forces have hit SK Hynix and Samsung in South Korea.