As of October 15, Kioxia had the largest outstanding margin-buying balance on the Tokyo Stock Exchange, at about ¥920 billion ($5.8 billion). With the share price falling and trading volume shrinking, investors may be forced to sell at a loss, adding to downward pressure.
Fears of a bubble in the artificial intelligence sector have also weighed on memory stocks. Kioxia reported strong revenue and profit growth in the June quarter, but its shares have fallen more than 52% from their high this year. Analysts are concerned that margin-call selling and negative sentiment toward the AI sector could push the stock lower in the near term.