TLDR
- Micron (MU) stock fell ~20% in five sessions after Google unveiled its TurboQuant AI memory compression algorithm
- TurboQuant could potentially reduce AI memory needs by up to six times, spooking memory sector investors
- Memory peer SanDisk (SNDK) also dropped 11% on the same news
- Despite the selloff, Morgan Stanley analyst Joseph Moore reiterated a Buy rating, calling it a “healthy pricing in of durability concerns”
- Wall Street maintains a Strong Buy consensus with an average price target of $536.55, implying ~51% upside from current levels
Micron had one of the cleanest quarters in recent memory. Record revenue. Record margins. Record earnings per share. Then Google walked in and complicated the story.
Alphabet unveiled TurboQuant, a compression algorithm that the company says can reduce the memory required to run large language models by up to six times. The market did not wait around to figure out the nuances. Micron fell roughly 20% over five trading sessions. SanDisk (SNDK) dropped 11% on the same news.
It was a sharp reaction to a single announcement, and it raises a fair question: does TurboQuant actually break the Micron thesis?
The short answer, according to analysts who spoke with industry contacts, is no — at least not in any structural way.
TurboQuant targets memory use in one specific part of a large language model, not the whole system. And with memory constraints loosening in that area, AI developers may simply push harder in other areas, keeping overall demand elevated.
Morgan Stanley Pushes Back on the Selloff
Morgan Stanley analyst Joseph Moore — a five-star rated analyst — reiterated a Buy rating on Micron after the drop. He described the reaction as a “healthy pricing in of durability concerns,” not a sign of deeper damage to the business.
Moore told clients that TurboQuant is an “evolutionary development, with basically no surprises for memory,” after speaking with people inside the industry. He sees supply tightening, not easing, with customers already paying upfront for large-volume memory contracts because they expect tight conditions to continue.
At current earnings levels, Moore estimates Micron and SanDisk can generate annual cash equal to 15%-25% of their current market caps — a level he believes will push the stocks “materially higher” over time.
The broader Wall Street view lines up with Moore. Of 28 analyst ratings tracked, 26 are Buys. Just two are Holds. The average price target sits at $536.55, which implies around 51% upside from current levels.
Micron also has a very specific supply problem that TurboQuant doesn’t resolve: the company can only meet between half and two-thirds of current HBM demand. New production capacity isn’t expected online until 2027. That gap isn’t going away quietly.
Growth Numbers That Are Hard to Ignore
The revenue trajectory here is blunt. Micron reported $13.6 billion in revenue the quarter before last, $23.9 billion last quarter, and is guiding for $33.5 billion next quarter.
That’s not a company running out of customers.
The total HBM market opportunity is expected to grow from $35 billion in 2025 to $100 billion by 2028. The next wave of AI growth is increasingly centered on inference — the process by which models work through problems in real time — which requires sustained, continuous memory use. That’s Micron’s lane.
The 52-week range runs from $61.54 to $471.34. The stock currently sits at $355.62, well off its highs but more than five times above its 52-week low.
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