Kioxia held its investor day on Tuesday and announced a series of updates to demand expectations and spending plans that were well-received by investors. Shares closed 7% higher on the trading day.
At the event, the company raised its forecast for flash memory exabyte demand, increasing the compound annual growth rate for calendar years 2025 through 2028 to 22%. That compares with a prior projection of 20% and reflects what Kioxia described as stronger anticipated demand driven by AI inference applications.
Kioxia also laid out capital expenditure guidance covering multiple years. The firm plans to average ¥470 billion in annual capital spending for fiscal years 2027 through 2029. That represents a modest uptick from the ¥450 billion figure planned for fiscal year 2027.
During the presentation management highlighted progress on product development aimed at a range of AI inference workloads and architectures. The company described the work in product advancement as part of its response to evolving AI-related demand patterns, without providing additional numerical detail beyond the demand and capex figures.
On the subject of capital allocation, Kioxia said it will remain flexible. Management indicated that, depending on business conditions and available investment opportunities, a significant portion of accumulated excess free cash flow could be returned to shareholders.
Market analysts responded to the investor day. Morgan Stanley raised its price target on Kioxia by more than 50% after the presentation, noting that AI inference growth should help support the stock at a free cash flow yield of roughly 10%. Morgan Stanley qualified that view by noting that the NAND market is expected to remain cyclical.
The companyâs updated demand forecast, capex path and product-development commentary together framed the investor day as a signal that management sees AI inference as a meaningful demand driver and is positioning investment and capital-return flexibility around that view. The presentation did not introduce new numerical detail beyond the revised CAGR for 2025-2028 and the stated capex averaging for 2027-2029.
Summary
Kioxia raised its flash memory exabyte demand CAGR for 2025-2028 to 22% from 20%, announced planned annual capital expenditures averaging ¥470 billion for fiscal years 2027-2029, reported progress on products for AI inference workloads, and said it would keep capital allocation flexible with the potential to return a significant portion of excess free cash flow to shareholders. Shares closed up 7% on Tuesday. Morgan Stanley increased its price target by over 50% and said AI inference growth should support a roughly 10% free cash flow yield despite NAND cyclicality.