CXMT Shares Fall Over 6 Percent Despite Record Nine-Month Profit Forecast

Updated 03:18 UTC

SHANGHAI: Shares of ChangXin Memory Technologies, known as CXMT, fell 6.5 percent in Shanghai on Monday, October 19, even after the company forecast a record profit for the first nine months of 2026. Market data showed the stock trading as low as 41 yuan during the session, down from a previous close of 45.02 yuan, before it recovered part of the loss.

The selling came after a filing the company made on Friday, October 16. CXMT said it expects net profit attributable to shareholders of between 131 billion yuan and 132.5 billion yuan for the January to September period. That is a sharp swing from a net loss of 5.28 billion yuan in the same period a year earlier. Revenue for the nine months is expected to reach 265 billion yuan to 270 billion yuan, up roughly 726 percent to 742 percent from a year earlier.

A quarter that did the heavy lifting

The third quarter alone explains much of the jump. CXMT guided for third-quarter revenue of 114.7 billion yuan to 119.7 billion yuan, up 589 percent to 619 percent from a year earlier and 15 percent to 20 percent above the second quarter. Third-quarter net profit was put at 53.395 billion yuan to 54.895 billion yuan.

The company tied the improvement to demand for artificial intelligence computing power. In its filing it said AI demand has risen fast since the second half of 2025, pushing the global DRAM market into shortage and lifting prices sharply. CXMT also pointed to its own work: more production capacity, process upgrades and better output per wafer, with scale effects still building.

On the same day as the forecast, Chairman Zhu Yiming proposed that the company buy back between 1 billion yuan and 2 billion yuan of its A-shares, using its own or self-raised funds. The shares would be used for employee equity incentives or a reduction of registered capital.

Why investors sold a record result

The fall says more about expectations than about the numbers. CXMT listed in Shanghai in July and quickly became the most valuable company on China's mainland market, closing on October 16 with a market value of about 3.06 trillion yuan. A stock priced for a long boom has little room for doubt, and doubt has been building. On October 9, CXMT shares suffered their biggest one-day drop since the listing, closing down 7.79 percent, amid concern that memory chip prices may be near a peak. A profit built on high prices invites one question: how long do the prices last?

Analysts are asking a second question about technology. CXMT plans to launch server DRAM built on its 4F2 design before the end of the year, a product aimed at the most profitable part of the memory market. Wall Street analysts cited in Korean reporting say the design's yields and process maturity are not yet verified, so it cannot yet be compared directly with the road maps of Samsung Electronics and SK Hynix.

What it means beyond one stock

CXMT is China's largest maker of DRAM, the working memory inside phones, computers and AI servers, and the world's fourth-largest supplier. Counterpoint Research data cited by CNBC put its share of global DRAM revenue at 10 percent in the third quarter, up from 5 percent a year earlier. That rise is why a selloff in this one stock gets read across the industry, from Samsung and SK Hynix in Seoul to Micron Technology in the United States.

What happens next turns on two dates. CXMT is due to report full third-quarter results later this month, when investors can test the forecast against audited detail. After that comes the planned 4F2 server memory launch before the end of 2026, the product that will show whether the company can turn a price-driven boom into a lasting place at the top of the memory market.