CXMT Stock Drops 6.5% as US Chip Rout Hits Asia Despite Profit Forecast

Monday saw a drop of up to 6.5% in ChangXin Memory Technologies (CXMT) shares, as a selloff in US chip stocks that began on Friday spilled across into Asian markets. The decline came even as the company projected a swing to profitability for the first nine months of 2026.

China's largest memory producer predicted a minimum of 131 billion yuan (about $19.6 billion) in net profit for the nine-month period on Friday, reversing a 5.28 billion yuan loss a year earlier. Despite the outlook, investors continued to sell.

What Drove the Decline in CXMT Shares Despite a Positive Earnings Forecast?

On Friday, the Nasdaq Composite fell over 2%, while the S&P 500 shed 1.1% to close its worst week since June, driven by a selloff on Wall Street led by semiconductor stocks.

Weakness reached Asia on Monday, which AJP linked to worry over AI spending funded by debt and expectations of faster rate increases.

In Korea, Bloomberg said the KOSPI fell as much as 3.2%, with Samsung Electronics and SK Hynix each dropping over 4% at the worst point. The Nikkei 225 in Tokyo slid about 2%.

The AJP report added that a new model from Chinese AI startup DeepSeek intensified the pressure, casting doubt on demand for the memory chips that make up CXMT's core market.

Will Strong Earnings Be Sufficient to Bring Back Asian Chip Investors?

In its filing, CXMT credits the AI build-out, which has made DRAM chips scarce and pushed up prices since the second half of 2025. Revenue for the nine months is forecast at between 265 billion and 270 billion yuan.

Counterpoint Research data shows CXMT's share of global DRAM revenue reached 10% in Q2, more than double its level a year ago. SK Hynix, in contrast, saw its share fall to 25% from 39% in the same period.

The prior week had already seen Samsung and SK Hynix shares decline on news of a CXMT advance on a denser DRAM design.

Foreign investor selling of chip stocks was a major force in last week's 14.5% drop in the KOSPI. AJP noted that these foreigners became net buyers on Monday, cutting the index's opening decline by about half.

Since Samsung and SK Hynix account for roughly half of the KOSPI, the durability of this buying will show whether earnings forecasts or AI funding worries carry more weight with investors.