Shares of memory and data storage companies, Micron (MU) and SanDisk (SNDK), fell sharply on Monday, extending their last week’s losses. While there was no company-specific news, the decline appears to continue last week’s trend, driven by new Google (GOOGL) research that reduces memory requirements for AI models. On Monday, MU stock fell nearly 10%, while SNDK declined 7%. Both stocks dropped another 2% in after-hours trading.
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New trading tool for SNDK bullsLast week, memory chip stocks tumbled as investors reacted to Google’s unveiling of TurboQuant, a new compression algorithm designed to cut memory requirements for AI systems. The announcement sparked concerns that future demand for DRAM and NAND memory may be lower than previously expected, triggering a selloff across the sector. Over the past five days, MU and SNDK have dropped more than 17%.
Why Analysts Aren’t Worried
Despite the recent selloff, Wall Street remains largely bullish on memory stocks.
Meanwhile, Morgan Stanley’s five-star analyst Joseph Moore maintained Buy ratings on both Micron and SanDisk, with price targets of $520 and $690, respectively. Moore noted that Google’s TurboQuant does not have the effect investors fear, pointing out that the reduction applies only to KV Cache memory, not memory overall. He called it “an evolutionary development, with basically no surprises for memory.”
According to Moore, the strength in memory stocks is more durable than the market currently believes.
Additionally, Citrini Research dismissed the sell-off, with an analyst posting on X, “It’s like saying Aramco should crash because Toyota came out with a next-generation hybrid engine,” implying that the panic over memory demand is unwarranted.
Meanwhile, Travis Prentice, chief investment officer at Informed Momentum Company, said the memory stocks rally “doesn’t look like it’s over yet, but expectations are high, so it makes sense to take some profits—especially in a troubled market environment.”
Which Memory Chip Stock Is the Better Buy, According to Analysts?
Using TipRanks’ Stocks Comparison tool, we compared major memory chip stocks. Among these stocks, MU stock offers the highest upside of 66.7% at a price target of $536.55 with a Strong Buy rating. On the other hand, SNDK offers a modest upside of 22.3%.
