Why is CXMT stock sliding today?

On Monday, CXMT stock experienced a significant drop of 7.6% following the company's nine-month earnings preview. Despite reporting a substantial year-over-year profit increase, investors were dismayed by the pronounced slowdown in sequential quarterly profit growth. The company had projected net profits between 131 billion yuan and 132.5 billion yuan for the first nine months of 2026, marking a stark contrast to a net loss of 5.28 billion yuan in the same period a year earlier.

However, the decline in Chinese financial media drew attention to the fact that Q3 net profit growth had slowed dramatically. The quarter-on-quarter expansion had plummeted to a mere 1–4%, after surging by an astounding 113% in Q2 and 246% in Q1. This concerning trend raised doubts about whether the DRAM upcycle had reached its peak.

The stark decline in profit growth left CXMT vulnerable to broader worries over slowing AI spending on chips, which had negatively impacted global chipmaking and AI stocks over the past two weeks. Despite the company's chairman proposing a share buyback of 1 to 2 billion yuan, the selling pressure persisted, with profit-taking from investors who had accumulated significant gains following the IPO contributing to the downward trend.

Additionally, the weakness in overseas memory giants' shares, which had already experienced sharp declines, compounded the pressure. China's major A-share indices remained largely unchanged throughout the day.