Shares of memory and data storage companies—Micron MU -6.97% ▼ and SanDisk SNDK -11.02% ▼ —tumbled on Thursday as investors reacted to Google’s GOOGL -3.44% ▼ unveiling of TurboQuant, a new compression algorithm designed to reduce memory requirements for AI systems. The announcement has raised concerns that future demand for DRAM and NAND memory could be lower than previously expected, triggering a selloff across the sector. On Thursday, MU stock was down by 7%, while SNDK fell 11%.

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Other memory players, including Western Digital WDC -7.70% ▼ and Seagate Technology STX -8.33% ▼ , were down over 7%. Meanwhile, Asian counterparts Samsung Electronics SSNLF +54.05% ▲ and SK Hynix closed down 4.71% and 6.23%, respectively, on Thursday. With memory stocks having surged so far this year, they remain vulnerable to developments like TurboQuant that could curb future demand.

Google TurboQuant Could Change AI Memory Usage

According to Google’s technical release, TurboQuant is an algorithm that uses vector quantization to reduce memory overhead. It compresses data in AI models without sacrificing accuracy or requiring retraining, lowering memory storage needs in data centers.

TurboQuant is expected to have minimal impact on HBM (High Bandwidth Memory) compared to standard DRAM (Dynamic Random-Access Memory). The algorithm mainly optimizes AI model inference, which primarily uses ordinary DRAM, while HBM is still essential for AI training.

Analysts Weigh In on TurboQuant

Lynx Equity Strategies analyst KC Rajkumar believes this is unlikely to significantly reduce memory or flash demand over the next 3–5 years due to tight supply constraints. He added that TurboQuant relieves bottlenecks without destroying overall demand for DRAM or flash memory.

Rajkumar reaffirmed his $700 price target on MU stock and stated that he would be a buyer on the recent pullback.

Meanwhile, Wells Fargo analyst Andrew Rocha stated that as AI models need more memory, TurboQuant could cut those costs—potentially reducing demand for extra memory. However, it’s unclear if the technology will be widely adopted beyond Google or if lab results will hold up in real-world use.

Which Memory Chip Stock Offers Highest Upside, According to Analysts?

Using TipRanks’ Stocks Comparison tool, we compared major memory chip stocks. Among these stocks, MU stock offers the highest upside of 51% at a price target of $537 with a Strong Buy rating. On the other hand, SNDK and WDC have the lowest upside, at around 16%.

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Micron Technology MU -6.97% ▼ stock has been under pressure despite reporting market-crushing fiscal second-quarter results, driven by robust demand for its memory solutions amid the AI boom and high pricing due to tight supply. MU stock has pulled back about 20% over the past five trading sessions, though it is still up 286% over the past year. Some analysts think that the selloff is due to profit-taking amid concerns about high capital spending in Fiscal 2027. Also, MU and other memory stocks, including SanDisk SNDK -11.02% ▼ , have plunged since Alphabet’s Google GOOGL -3.44% ▼ unveiled TurboQuant, a new compression method that the tech giant says could reduce the amount of memory required to run large language models by six times.

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Despite the recent selloff, most analysts, including top Morgan Stanley analyst Joseph Moore, remain upbeat about Micron stock and see the pullback as a buying opportunity.

Morgan Stanley Analyst Remains Bullish on Micron Stock

On Thursday, Moore reiterated a Buy rating on Micron Technology and peer SanDisk. The 5-star analyst views the selloff in these stocks as a “healthy pricing in of durability concerns,” including those related to capital expenditure, demand destruction, and productivity.

Moore views the strength in memory demand as more durable than the market expects, with limited supply posing a major bottleneck for AI growth. He contends that those taking sell cues from prior cycles are missing the point. Moore noted that memory shortages are intensifying amid strong demand, and customers are paying in advance for large-volume deals as they believe that these shortages will persist.

Regarding Google’s TurboQuant memory optimization, following talks with industry contacts, Moore said that it is an “evolutionary development, with basically no surprises for memory.” At these earnings levels, Moore expects Micron and SanDisk’s annual cash generation to be 15%-25% of current market caps and believes that “while it won’t last forever, it is going to last for long enough to see the stocks move materially higher.”

Is Micron Stock a Buy, Sell, or Hold?

With 26 Buys and two Holds, Wall Street has a Strong Buy consensus rating on Micron Technology stock. The average MU stock price target of $536.55 indicates about 51% upside potential from current levels.

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SanDisk (NASDAQ:SNDK) stock is down ~7% today as investors react to the same trigger weighing on the broader memory space, with Google’s newly introduced TurboQuant compression technology raising questions about how much memory future AI systems will actually require.

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The algorithm is designed to significantly reduce the memory footprint of large AI models, which directly challenges the assumption that AI-driven demand will keep pushing higher at the same pace. That shift, even if still early, is enough to pressure sentiment across memory names that have rallied hard on the back of the AI buildout.

Today’s slide follows yesterday’s 3.5% drop after SanDisk announced a $1 billion investment in Nanya Technology tied to a long-term supply agreement, a move that may strengthen its positioning over time but raised near-term questions around the expected return on that investment and the potential impact on margins and cash flow.

Meanwhile, following a recent management meeting, Bank of America analyst Wamsi Mohan came away with a more constructive view on the bigger picture, particularly around demand durability.

Mohan noted that the firm is “more confident in [the] sustainability of NAND demand,” pointing to continued strength from hyperscalers and AI-related workloads. At the same time, Mohan emphasized that SanDisk is leaning into longer-term supply agreements and a shift toward higher-margin products, which should support revenue growth over time.

During the meeting, Mohan pointed to management’s comments on Google’s TurboQuant compression technology. While the market reaction focused on the idea that more efficient AI models could reduce memory demand, the analyst noted that management sees the impact differently. Specifically, improved efficiency may enhance the return on investment for hyperscalers, potentially encouraging broader adoption of AI workloads. In that scenario, lower memory requirements per model could be offset by higher overall usage, ultimately supporting demand rather than weakening it.

At a higher level, Mohan’s takeaway suggests that while near-term volatility is being driven by concerns around AI efficiency and spending, the underlying demand story remains intact. The analyst also highlighted that new business models, including multi-year contracts with both fixed and variable pricing components, could help smooth out some of the historical swings in the memory market.

To this end, Mohan rates SNDK shares a Buy, while his $900 price objective implies ~42% upside from current levels. (To watch Mohan’s track record, click here)

The rest of Wall Street is also leaning positive on the shares, though with a more measured tone. SNDK carries a Strong Buy consensus based on 15 analyst ratings, including 12 Buys and 3 Holds. The average price target stands at $700, implying about 11% upside from current levels, while the high-end estimate reaches $1,000. (See SNDK stock forecast)

Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

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Shares of memory and data storage companies—Micron MU -6.97% ▼ and SanDisk SNDK -11.02% ▼ —tumbled in early trading on Thursday as investors reacted to Google’s GOOGL -3.44% ▼ unveiling of TurboQuant, a new compression algorithm designed to reduce memory requirements for AI systems. The announcement has raised concerns that future demand for DRAM and NAND memory could be lower than previously expected, triggering a selloff across the sector. MU stock is down by 2.12%, while SNDK fell over 3% in pre-market hours.

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Other memory players, including Western Digital WDC -7.70% ▼ and Seagate Technology STX -8.33% ▼ , were down about 2% in pre-market trading. Meanwhile, Asian counterparts Samsung Electronics SSNLF +54.05% ▲ and SK Hynix closed down 4.71% and 6.23%, respectively, on Thursday. With memory stocks having surged so far this year, they remain vulnerable to developments like TurboQuant that could curb future demand.

Google TurboQuant Could Change AI Memory Usage

According to Google’s technical release, TurboQuant is an algorithm that uses vector quantization to reduce memory overhead. It compresses data in AI models without sacrificing accuracy or requiring retraining, lowering memory storage needs in data centers.

TurboQuant is expected to have minimal impact on HBM (High Bandwidth Memory) compared to standard DRAM (Dynamic Random-Access Memory). The algorithm mainly optimizes AI model inference, which primarily uses ordinary DRAM, while HBM is still essential for AI training.

Analysts Weigh In on TurboQuant

Wells Fargo analyst Andrew Rocha stated that as AI models need more memory, TurboQuant could cut those costs—potentially reducing demand for extra memory. However, it’s unclear if the technology will be widely adopted beyond Google or if lab results will hold up in real-world use.

Meanwhile, Lynx Equity Strategies analyst KC Rajkumar believes this is unlikely to significantly reduce memory or flash demand over the next 3–5 years due to tight supply constraints. He added that TurboQuant relieves bottlenecks without destroying overall demand for DRAM or flash memory.

Rajkumar reaffirmed his $700 price target on MU stock and stated that he would be a buyer on Wednesday’s pullback.

Which Memory Chip Stock Offers Highest Upside, According to Analysts?

Using TipRanks’ Stocks Comparison tool, we compared major memory chip stocks. Among these stocks, MU stock offers the highest upside of 40% at a price target of $537 with a Strong Buy rating. On the other hand, SNDK has the lowest upside of 3%.

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Traders are halfway through the week, and there are still plenty of stock market stories worth reading today. Let’s dig into that below, with a breakdown of the hottest market happenings on Wednesday.

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• iTonic Holdings ITOC -4.93% ▼ stock rocketed on a private placement.
• Chewy CHWY +1.66% ▲ stock soared thanks to strong earnings results.
• PDD Holdings PDD -1.94% ▼ stock also rallied alongside an earnings report.
• Braze BRZE +7.92% ▲ stock surged despite a mixed earnings report.
• Spotify SPOT +1.05% ▲ stock was down on new efforts to tackle AI imposters.
• VolitionRx VNRX +0.89% ▲ stock climbed on new cancer detection results.
• OpenAI is getting ready to shut down its Sora AI video app.
• Merck & Co. MRK -0.37% ▼ stock soared on plans to purchase Terns Pharmaceuticals TERN +0.59% ▲ .
• ARM Holdings ARM -1.45% ▼ stock jumped on praise from analysts.
• The Dow Jones DJIA -0.52% ▼ was up alongside the latest updates on the war in Iran.
• Microsoft MSFT -1.37% ▼ slipped over concerns about its relationship with OpenAI.
• Cipher Digital CIFR -9.63% ▼ stock rallied on a new partnership.
• Dell Technologies DELL -4.45% ▼ stock climbed on the launch of a new line of AI computers.
• Meta Platforms META -7.96% ▼ stock was on the rise following a new partnership with Stripe.
• Palantir Technologies PLTR -4.78% ▼ stock was boosted by analyst praise for the company’s Golden Dome inclusion.
• Figma FIG +5.03% ▲ stock dipped on neutral analyst coverage.
• Advanced Micro Devices AMD -7.49% ▼ stock gained on reports of incoming CPU price increases.
• SanDisk SNDK -11.02% ▼ stock dropped on a $1 billion investment in Taiwan chip maker Nanya Technology.
• Eli Lilly LLY -2.11% ▼ stock rallied alongside praise from a top analyst.
• Rocket Lab USA RKLB -9.52% ▼ stock was boosted by reports of an incoming IPO for SpaceX.
• Home Depot HD -1.23% ▼ stock was up on news of the retailer’s Mingledorff’s acquisition.
• CD Projekt OTGLY -2.41% ▼ stock climbed on news that the developer has integrated AI into its game design.

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Shares in memory storage group SanDisk SNDK -11.02% ▼ plunged 6% today as investors gave a thumbs-down to a $1 billion strategic equity investment in Taiwan chip maker Nanya Technology to shore up DRAM supplies.

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Secure Access to DRAM

SanDisk said that is buying about 139 million shares of Nanya, representing a roughly 3.9% stake at a 15% discount to Nanya’s 30-day average trading price. Sandisk said under the agreement Nanya would supply it with dynamic random access memory or DRAM, products.

This could be strategically important for SanDisk because due to rapid AI infrastructure growth there are concerns over a supply squeeze for DRAM memory, NAND flash memory and hard drives. This has resulted in a shortage of memory for other technology markets such as PCs and smartphones.

However, despite this attempt to use its financial power to shore up vital supply sources, many investors were left wondering whether SanDisk had overpaid.

Why are SanDisk Shareholders Unhappy?

It is understood that investors are:

• Nervous about the risks of a cross-border deal
• Geopolitical exposure to Taiwan’s position in the global semiconductor sector,
• The impact of any Chinese military action on the island
• A longpayback horizon for investors who want immediate returns from the current AI demand boom.

The significant share price drop today is a shock given the strong performance the company has delivered over the last 12 months.

As can be seen above, it is up over 1245% over that period driven by accelerating data center adoption. It recorded data center revenue of $440 million, up 64% sequentially in Q2, with Edge revenue coming in at $1.678 billion, up 21% sequentially, and consumer revenue of $907 million, up 39% sequentially.

Is SNDK a Good Stock to Buy Now?

On TipRanks, SNDK has a Strong Buy consensus based on 12 Buy and 3 Hold ratings. Its highest price target is $1,000. SNDK stock’s consensus price target is $700, implying a 5.17% upside.

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SanDisk (NASDAQ:SNDK) shares are volatile today, after swinging sharply lower earlier in the session. The stock was down as much as 9% at one point before trimming losses, and is now off about 3.5%. The pullback follows the company’s $1 billion strategic investment in Nanya Technology, a move that has not been well received by investors.

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While the deal is intended to strengthen long-term supply positioning in memory, the immediate reaction reflects concerns around capital allocation, execution risk, and exposure to a highly cyclical part of the semiconductor market. Committing such a large amount of capital at this stage raises questions about timing, especially given the industry’s history of sharp swings between shortages and oversupply, which can quickly pressure pricing and margins. Investors also appear uneasy about the added complexity that comes with deeper involvement in manufacturing and supply partnerships, particularly in a region that carries geopolitical sensitivity.

Still, Citi analyst Asiya Merchant, who ranks among the top 1% of Wall Street analysts, sees the bigger picture differently and continues to lean bullish on the SNDK shares, arguing that the underlying industry setup remains supportive. Merchant points to sustained demand tied to AI infrastructure and data center expansion, alongside disciplined supply across the NAND market, which together create a favorable backdrop for pricing and profitability.

“SNDK is a beneficiary of this favorable environment, additionally coupled with its Bics8 qualifications, serving as a competitive moat, and with increasing mix to data center further benefiting its margins through the longer-term,” the analyst opined.

Merchant also sees potential upside in the near term, opening what he described as an “Upside 90-Day ST View” based on continued strong execution and demand trends. The analyst notes that “the company continues to benefit from strong demand reflecting hyperscaler eSSD demand momentum driving better pricing, robust margins, and eSSD-mix opportunity,” while adding that tight supply conditions and pricing discipline should help sustain profitability in the coming quarters.

To this end, Merchant assigns SNDK shares a Buy rating and a $875 price target, which implies a 33% upside from current levels. (To watch Merchant’s track record, click here)

As for the broader Wall Street view, sentiment remains clearly positive, with SanDisk shares carrying a Strong Buy consensus based on 15 analyst ratings, including 12 Buys and 3 Holds, with no Sell recommendations. However, the average price target sits at $700, implying only about 3% upside from current levels, suggesting that while confidence in the long-term story remains intact, expectations for near-term gains have become more restrained following the stock’s strong run over the past year. (See SNDK stock forecast)

Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

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