Key Takeaways
- Micron (MU) shares declined approximately 20% across five trading days following Google’s introduction of its TurboQuant AI memory compression technology
- The TurboQuant algorithm claims to slash AI memory requirements by as much as six-fold, triggering investor concern across the memory sector
- Competitor SanDisk (SNDK) experienced an 11% decline following the same announcement
- Morgan Stanley’s Joseph Moore maintained his Buy recommendation, characterizing the selloff as a “healthy pricing in of durability concerns”
- Analyst consensus remains at Strong Buy with a mean price target of $536.55, suggesting approximately 51% appreciation potential
Micron just delivered what many considered its strongest quarterly performance in years. Revenue hit record levels. Margins reached all-time highs. Earnings per share broke company records. Then Google dropped a bombshell that sent investors scrambling.
When Alphabet introduced TurboQuant, describing it as a compression technology capable of cutting memory requirements for large language models by up to six-fold, the market’s response was immediate and brutal. Micron’s stock plummeted approximately 20% during the following five sessions. SanDisk (SNDK) wasn’t spared either, tumbling 11% on identical concerns.
The magnitude of the reaction to a single technology announcement begs an important question: has TurboQuant fundamentally undermined the investment case for Micron?
According to industry experts and analysts who’ve consulted with sector insiders, the answer appears to be negative—at least from a structural standpoint.
TurboQuant’s impact is focused on optimizing memory usage in a specific component of large language models, not the entire infrastructure. Industry observers suggest that as memory bottlenecks ease in one area, AI engineers will likely intensify development in other memory-intensive domains, sustaining overall demand levels.
Morgan Stanley Challenges the Market Reaction
Following the selloff, Morgan Stanley’s Joseph Moore—who holds a five-star analyst rating—reaffirmed his Buy stance on Micron. He characterized the market’s response as representing a “healthy pricing in of durability concerns” rather than evidence of fundamental business deterioration.
After consulting with industry participants, Moore informed investors that TurboQuant represents an “evolutionary development, with basically no surprises for memory.” He observes supply conditions tightening rather than loosening, noting that customers are already committing to prepaid, high-volume memory agreements due to expectations of continued supply constraints.
Based on current profitability metrics, Moore calculates that Micron and SanDisk could produce annual cash flow equivalent to 15%-25% of their present market capitalizations—a dynamic he anticipates will drive shares “materially higher” going forward.
The wider Street sentiment aligns with Moore’s perspective. Among 28 tracked analyst ratings, 26 recommend buying shares. Only two advise holding. The consensus price target stands at $536.55, indicating roughly 51% upside from present trading levels.
Micron also confronts a concrete supply challenge that TurboQuant cannot address: the company currently fulfills only 50% to 67% of existing HBM demand. Additional manufacturing capacity won’t come online until 2027. This supply-demand imbalance isn’t disappearing anytime soon.
Revenue Growth That’s Difficult to Dismiss
The revenue progression tells a compelling story. Micron posted $13.6 billion in revenue two quarters ago, followed by $23.9 billion last quarter, and projects $33.5 billion for the upcoming period.
These aren’t the numbers of a company facing demand erosion.
Industry projections estimate the total HBM market expanding from $35 billion in 2025 to $100 billion by 2028. The emerging phase of AI expansion increasingly emphasizes inference—the real-time problem-solving process employed by AI models—which demands persistent, ongoing memory utilization. This represents Micron’s core competency.
The 52-week trading range extends from $61.54 to $471.34. Shares currently trade at $355.62, significantly below recent peaks but more than quintupling the 52-week low.
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