CXMT shares drop 7% despite forecast profit turnaround

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CXMT shares drop 7%

Highlights

CXMT shares fall 7.33% amid chip selloff.
CXMT forecasts a major nine-month profit rebound.
AI spending concerns outweigh stronger DRAM demand.

According to the latest market data, CXMT shares traded at 41.72 yuan on the Shanghai Stock Exchange, down 7.33%, as investors remained cautious about AI-related spending and semiconductor valuations. The decline followed a broader selloff in U.S. technology stocks, BeInCrypto reports.

US chip selloff spreads to Asian markets

The Nasdaq Composite dropped more than 2.14% Friday, while the S&P 500 lost 1.1% and recorded its weakest week since June. Concerns about debt-financed artificial intelligence investment and the possibility of faster interest-rate increases weighed on semiconductor companies. Those worries carried into Monday's Asian trading session, putting pressure on major memory chip producers.

Meanwhile, South Korea's KOSPI index rose 1.78%, while shares of Samsung Electronics and SK Hynix gained 0.79% and 2.69%, respectively. Japan's Nikkei 225 declined approximately 0.7%, reflecting broader weakness across technology stocks. Reports about a new AI model from Chinese startup DeepSeek also raised questions about future demand for memory chips, adding to investor uncertainty.

CXMT forecasts strong earnings recovery

CXMT expects net profit of at least 131 billion yuan, or approximately $19.6 billion, for the first nine months of 2026. That would mark a substantial turnaround from a 5.28 billion yuan loss during the same period last year. The company also projects revenue between 265 billion and 270 billion yuan, supported by stronger demand and higher prices for dynamic random-access memory (DRAM) chips.

The manufacturer has expanded its position in the global memory market as AI infrastructure investment increases demand for DRAM. Counterpoint Research estimates that CXMT accounted for 10% of worldwide DRAM revenue in the second quarter, more than double its share a year earlier. SK Hynix, meanwhile, saw its share decline from 39% to 25%, highlighting the changing competitive landscape.

AI investment concerns overshadow earnings

CXMT's selloff illustrates how broader market concerns can outweigh improving company performance. Investors are questioning whether heavy spending on AI infrastructure can continue supporting semiconductor demand, particularly as borrowing costs and financing risks attract greater scrutiny. Stronger earnings have not been enough to shield memory manufacturers from the sectorwide retreat.

The pressure extends beyond individual companies. South Korea's KOSPI lost 14.5% last week amid foreign selling, although renewed buying Monday helped reduce its initial decline. With Samsung Electronics and SK Hynix accounting for a substantial share of the index, investor confidence in memory chip demand remains important for the wider Asian equity market.

As we previously reported, ApeX launches CXMT on-chain perpetual contracts with up to 50x leverage.

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