Wall Street Analysts Urge Investors to Buy Micron (MU) and Sandisk Following Google TurboQuant Dip

Key Takeaways

Table of Contents

Shares of Micron and Sandisk experienced significant declines following Google’s announcement of TurboQuant, an algorithm that reduces AI memory requirements by 6x or more
Market participants worried the technology could dampen memory chip demand, driving both equities down more than 15% from recent peaks
Mizuho Securities analyst Vijay Rakesh maintains the correction represents an overreaction and confirms Outperform ratings for both companies
Rakesh contends that efficiency gains like TurboQuant historically drive increased AI deployment, ultimately expanding memory demand through Jevons’ Paradox
NAND content in AI server configurations has expanded twofold over the last twelve months, with spot market prices climbing consistently each quarter

Memory chip manufacturers Micron and Sandisk experienced sharp declines last week following Google’s publication of technical details regarding TurboQuant, an innovative compression technology that reduces AI model memory requirements by a minimum factor of six. The algorithm simultaneously delivers inference performance improvements of up to eight times while maintaining model accuracy levels.

Investors interpreted the development negatively for semiconductor memory producers. The prospect of reduced memory consumption per artificial intelligence model raised concerns about weakening chip demand for industry players including Micron and Sandisk.

Both equities have retreated at least 15% from all-time peak valuations reached in late last month. Trading activity on Thursday showed Sandisk declining 5.9% to $652, with Micron falling 5.5% to reach $347.78.

Sandisk Corporation, SNDK

Market sentiment took an additional hit when President Trump’s Wednesday evening remarks failed to provide clarity on the Iran conflict resolution timeline, creating uncertainty that carried into Thursday’s trading.

Google researchers initially explored TurboQuant concepts in 2025, with updated findings on AI inference capabilities published in subsequent research papers.

Mizuho Analyst Challenges Market Reaction

Vijay Rakesh, an analyst with Mizuho Securities, countered the prevailing market sentiment in his client communications. He maintained Outperform ratings for both Micron and Sandisk while preserving price objectives of $530 and $710 respectively.

Rakesh advised clients to “buy the TurboQuant memory pullback,” characterizing concerns regarding peak memory demand as “overblown.”

His central thesis suggests that artificial intelligence efficiency enhancements have consistently resulted in increased expenditure rather than reduced spending. This economic principle, recognized as Jevons’ Paradox, describes how improved efficiency or reduced cost of a resource typically stimulates higher overall consumption.

Rakesh referenced three historical precedents. Virtual machine technology was anticipated to decrease server requirements but generated the opposite outcome. The DeepSeek introduction in 2025 triggered GPU demand concerns, yet AI infrastructure investment continued expanding. The transition from copper to optical networking infrastructure, despite offering 10x bandwidth improvements, drove higher AI server capital investment rather than cost reductions.

NAND Market Fundamentals Show Continued Strength

Rakesh observed that NAND memory integration in AI server architectures has doubled during the preceding twelve-month period. Spot market valuations have maintained upward momentum throughout consecutive quarters.

He maintained that TurboQuant-type compression technologies would “enable larger large-language models, faster inference and better tokenomics, spurring more spending” throughout the AI ecosystem.

With concurrent price appreciation and robust fundamental demand dynamics, Mizuho anticipates Micron and Sandisk could surpass already elevated earnings projections in upcoming periods.

Sandisk currently trades near $652, positioned below Mizuho’s $710 valuation target. Micron hovers around $347, compared to the firm’s $530 price objective.

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