Kioxia’s stock price has plunged since reaching a record high in late June, falling from ¥112,750 to ¥63,100 today. The shares have dropped to their lowest level since May 29, mirroring the broader selloff across memory-chip stocks while significantly underperforming the Nikkei 225 Index.

Kioxia stock drops despite the memory boom

Top memory stocks have plunged in the past few weeks despite the ongoing boom in the memory industry, with companies like Samsung and Micron publishing strong financial results. 

Micron, the third-biggest player in the High-Bandwidth Memory (HBM) industry, said that its revenue jumped by 300% in Q3, with the management predicting that its fourth-quarter revenue will cross the $50 billion milestone.

Samsung also published strong results, with its revenue and earnings soaring substantially. Its management insisted that the boom had more room to run.

Memory prices have continued rising, with the top companies operating at full capacity. As a result, these numbers mean that Kioxia’s business is also booming, with demand from hyperscalers and other large clients rising. Some of its top clients are companies like Apple, Microsoft, and Dell.

The most recent numbers showed that Kioxia’s business has continued growing. Its revenue jumped by 188% in its fourth quarter jumped by 188% YoY and by 84.5% from the previous quarter. Its ¥1 trillion ($6.8 billion) revenue was much higher than its guidance of between ¥845 billion and ¥935 billion.

The same trend happened in its profitability, with the operating profit rising by 1,499% YoY to ¥599 billion. Its net income jumped by 2,990% to ¥409 billion, and this trend will likely continue as demand and memory prices jump. 

Analysts predict that its growth will continue this year. The average estimate is that its annual revenue will jump to ¥9.64 trillion, up by 9,584% YoY. It is expected to soar by 28% in the next financial year to ¥12.4 trillion.

Concerns about memory prices

Despite this growth, Kioxia’s stock has plunged by over 40% from its all-time high. This retreat has coincided with that of other memory names. SK Hynix stock has dropped by 38%, while Samsung has fallen by 30%. In the US, Micron stock has dropped from $1,246 to $904, while Sandisk has fallen from $2,343 to $1,615.

One reason for this is that investors are booking profits after these stocks soared by triple digits from January. In a recent statement, Morgan Stanley’s Mike Wilson warned that investors would rotate from memory and semiconductor companies to hyperscalers. 

It is common for top performers in the stock market to retreat. A good example of this is Palantir stock,which has retreated this year. It was one of the best gainers last year, with its valuation nearing $500 billion.

Another reason is the fear that memory prices will eventually peak and start falling. It may happen this year, in 2027, or later. If this happens, stocks that thrived during the climb will likely retreat. 

Kioxia share price technical analysis

Kioxia stock chart | Source: TradingView

The daily chart shows that the Kioxia share price has slumped from a high of ¥112,350 in June to the current ¥62,650. It has dropped below the 50-day Exponential Moving Average (EMA).

The stock has slumped below the 38.2% Fibonacci Retracement level and the Strong pivot reverse point of the Murrey Math Lines tool. Therefore, the stock will likely remain under pressure in the near term, potentially moving to the ¥57,150. In the future, however, the stock will likely bounce back as investors buy the dip.

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GE Aerospace stock fell more than 4% in premarket trading even after the company reported strong quarterly earnings. The shares dropped to $344.70, leaving them about 10% below their highest level of the year. So, is this post-earnings sell-off likely to deepen, or does it present a buying opportunity ahead of a rebound?

GE Aerospace stock dropped as earnings jumped

GE, the biggest company in the aircraft engine industry, is doing well despite the US-Iran war that led to disruptions in the civil aviation industry. Its financial results showed that its revenue and profits rose, with the management expecting further growth in the near term. 

The company’s orders rose by 17% in the second quarter and by nearly 50% in the year’s first half. Its revenue soared by 24% in this quarter to $12.6 billion, with its operating profit hitting $2.7 billion. Most importantly, its backlog jumped to over $210 billion. Some of the top orders during the quarter came from Copa Airlines and Turkish Aerospace.

By segment, its commercial engines and services (CES) sales jumped by 27% to $9.7 billion, while its defense & propulsion technologies jumped to $3.4 billion. In a statement, the CEO said:

“GE Aerospace delivered a strong second quarter with revenue and EPS both up more than 20% driven by robust commercial services growth. FLIGHT DECK continues to fuel significant operational improvements across services and equipment with record internal shop visit output.”

Most importantly, the company now expects that its business will continue booming this year. It expects that its operating profit will jump to between $10.5 billion and $10.75 billion, while its earnings per share (EPS) will move to between $7.65 and $7.85. These are all big numbers considering that it made an operating profit of $9.1 billion and an EPS of $6.37. 

Good company at the wrong price

A key concern that GE stock faces is that it is a highly valued company. Its forward price-to-earnings ratio stands at 47.65, a high number considering the industrial sector median stands at 21. 

In contrast, fast-growing companies like Nvidia and Micron have a lower figure. Nvidia has a forward P/E ratio of 23, while Micron has 15. As such, while GE Aerospace is a good company with a substantial market share, its valuation has become substantially high. 

GE stock technical analysis

GE Aerospace stock chart | Source: TradingView

The daily chart shows that the GE share price bottomed at $269.47 in April and then surged to a high of $382. It has then pulled back, a performance that accelerated in the premarket session.

The stock has moved to the crucial support, which coincided with the highest point in February. This price was the upper side of the cup-and-handle pattern, a common continuation sign. 

GE has remained above the 50-day and 100-day moving averages. Therefore, despite its high valuation, there is a likelihood that the stock will resume the uptrend. If this happens, the next level to watch will be the Ultimate Resistance of the Murrey Math Lines tool at $375.

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Dell Technologies stock has moved sideways since May, when it peaked at a record high of $469.60. It retreated to $412 as investors remained jittery about the AI sector and its hefty valuation metrics. Still, despite the pullback, it remains 274% above its lowest point this year.

Dell stock has benefited from the AI boom

Dell Technologies is a top technology company that operates in two key segments: Infrastructure Solutions Group (ISG) and Client Solutions Group (CSG). ISG sells products like AI-optimized servers, traditional servers and networking, and storage solutions. Its CSG business includes products like desktops, notebooks, and workstations.

Dell’s business has done well in the past few months because of the ongoing artificial intelligence boom, which has been driven by its servers and storage solutions.

The most recent financials showed that its business continued growing as the AI buildup phase gained momentum. Its quarterly results showed that revenue jumped 88% in the first quarter to $43.8 billion. 

The rising server and networking solutions helped to push its profitability higher. Its earnings per share (EPS) soared by 282% YoY to $5.24, while its free cash flow rose to $4.1 billion.

Dell’s ISG revenue soared 181%, with its AI-optimized servers rocketing by 757% to $16.1 billion. Its PC business has also done well, with its revenue soaring by 17% to $14.6 billion. 

Growth to continue, but valuation concerns persist

This management believes that the business has more room to grow in the near term. For example, the second quarter revenue is expected to jump to about $45 billion, while its adjusted EPS will soar by 164% to $4.48. 

For the year, the management sees its revenue soaring 47% to $165 billion. These are strong numbers, especially for a company that was started 42 years ago and is a sign that it continues to evolve.

Other similar companies have done well this year. HP Enterprise (HPE) has jumped by 135% from its lowest point this year, while Lenovo Group has jumped by 143% since January, making it the best-performing company in the Hang Seng Index.

Dell’s next earnings are expected to show that this momentum continues, as we have not seen a slowdown in the data center industry. Also, companies like Samsung and Micron have all published strong numbers, a sign that the growth momentum accelerated. 

The challenge, however, is that the server and storage business has always been cyclical, with eras of booms being followed by periods of slumps. As their prices jump, manufacturers tend to boost production, which increases the supply. 

Also, there are concerns that Dell has become highly overvalued, with the forward PE ratio rising to 24, more than double its five-year average. 

Dell stock technical analysis

Dell Technologies stock chart | Source: TradingView

Technicals show that the Dell Technologies stock has moved sideways in the past few weeks, remaining inside the narrow range of between $360 and $469. There are signs that it has formed a double-top pattern.

The stock has also formed an island reversal pattern, which normally happens after an asset gaps upwards. Its MACD indicator formed a bearish crossover and has continued falling.

Therefore, there is a risk that the stock will drop further in the near term, potentially to the support level of $360. A move below that level may drop further to the key support of $300.

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Salesforce stock has plunged by more than 50% from its December 2024 peak as concerns about its growth outlook have intensified. Its market capitalization has fallen from more than $347 billion to about $136 billion, and the selloff could continue as investors remain concerned about the company’s strategy and long-term growth prospects.

Salesforce stock has dropped amid SaaSpocalypse fears

CRM stock has been in a steep decline over the past few years as concerns about its growth have escalated. Recently, the stock has dropped because of the rising SaaSpocalypse fears. 

SaaSpocalypse is a relatively new term referring to fears that AI agents will replace traditional software and the “per seat” pricing model. A good example of this is what Starbucks is doing. 

According to Bloomberg, the company is now building its own AI-assisted replacement for a Microsoft system that tracks inventory and an IBM solution that manages maintenance. It aims to save the $400 million it spends annually on software.

The fears in the software industry escalated this week after IBM published its financial results. IBM said that its business slowed as customers reprioritized their capital expenditure, redirecting it towards hardware purchases like servers and memory.

Salesforce’s organic growth has been slowing for a while. The most recent results showed that its revenue rose by 13% in the first quarter. While this growth is solid for a company that has been in business for years, it was not organic. Its $11.1 billion revenue included $444 million from Informatica, a company it acquired in a $8 billion deal.

The company has been one of the most acquisitive ones in the US. It has spent billions of dollars acquiring firms like Own Company, Fin, Bluebirds, Tableau, and Slack.

Analysts expect that Salesforce’s business will remain under pressure in the coming months. The average estimate is that its revenue jumped by 10% in the last quarter to $11.32 billion. Its annual revenue is expected to be $46.1 billion, followed by $50.4 billion next year. 

Bargain or a value trap?

At face value, there are signs that Salesforce stock has become a bargain. For one, its Non-GAAP forward price-to-earnings ratio has dropped to 11.8, well below the sector median of 24. Its five-year average stands at 24. 

Similarly, the forward PEG ratio stands at 0.73, also lower than other companies in the tech industry. The challenge, however, is that these valuation metrics include the extra funds made from its Informatica buyout. 

As a result, the company will need more growth catalysts over time. One of this catalysts will be its Agentforce and data segments, whose annual recurring revenue soared to $3.4 billion, a 200% jump. It has deployed over 3.8 billion Agentic Work Units (AWU) across Agentforce and Slack.

READ MORE: Salesforce stock falls after KeyBanc downgrade on AI growth concerns

CRM stock technical analysis

Salesforce stock chart | Source: TradingView

The weekly chart shows that the CRM share price has slumped in the past few years, moving from a record high of $367 to a low of $146. It remains below the 50-week Exponential Moving Average (EMA).

The stock has also remained below the Supertrend indicator and the 78.6% Fibonacci Retracement level. 

Therefore, the stock will likely remain under pressure in the near term. In this, it may drop and retest the year-to-date low of $146. 

In the long-term, however, the stock will likely bounce back as investors buy the dip in software stocks. 

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The technology sector has done well in the past decade, with the Nasdaq 100 Index beating its top peers like the S&P 500 and the Dow Jones. This article explores the outcome if one had invested $10,000 in the Invesco QQQ ETF (QQQ), ProShares UltraPro QQQ (TQQQ), and ProShares UltraPro Short QQQ (SQQQ) five years ago. 

What are QQQ, TQQQ, and SQQQ

QQQ is one of the largest technology-focused exchange-traded funds (ETF) in the United States with over $476 billion in assets under management (AUM). It has an expense ratio of 0.18%. 

The fund tracks the Nasdaq 100 Index, which tracks the biggest technology names in the US. Its top names are companies like Nvidia, Apple, Micron, Microsoft, Amazon, and AMD. It is rebalanced quarterly and reconstituted annually. 

The UltraPro QQQ ETF, on the other hand, uses a different approach. It is a leveraged fund that seeks a daily investment return that corresponds to three times the daily performance of the Nasdaq 100 Index. It has over $35 billion in assets and has a net expense ratio of 0.82%.

The UltraPro Short QQQ ETF takes the opposite of the TQQQ by allowing investors to profit when the daily price of the Nasdaq 100 Index drops. If the index drops by 1% in a session, the fund gains 3x. For example, the index dropped by 0.28% on Wednesday, while the SQQQ gained 0.80%.

In most cases, risk-averse investors who are bullish on tech stocks buy the QQQ ETF or QQQM, its cheaper sibling. Investors who expect it to jump over time buying the TQQQ, while those who see it falling buy the SQQQ fund. 

Five-year returns compared

The past five years have seen technology stocks soar, with several names attaining a $1 trillion valuation. The QQQ ETF has jumped by 99% in this period, while the TQQQ has jumped by 131%. On the other hand, the SQQQ ETF has dropped by 96% in the same period.

Note that the TQQQ ETF did not jump by 300% in this period (3x that of the QQQ). The reason for this is that its performance is based on the daily gains or losses of the Nasdaq 100 Index. 

The best way to assess an asset’s performance is not to just look at the price return. Instead, one should look at the total return, which includes the dividends paid.

In this case, the QQQ ETF has returned 105%, while the TQQQ has jumped by 142%. The SQQQ fund has dropped by 96% in the same period.

QQQ vs TQQQ vs SQQQ five-year performance | Source: Seeking Alpha

Therefore, a $10,000 investment in QQQ five years ago would now be worth about $20,500. A similar investment in the TQQQ ETF would be worth $24,200 today, while the same in SQQQ would be worth just $500.

To be clear, past performance does not always guarantee what will happen in the future, meaning that the situation may reverse. For example, the SQQQ ETF jumped by nearly 90% in 2022 as the stock market plunged. Also, these figures are gross and don’t include taxes.

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