Micron, SanDisk Stocks Tumble After Google Unveils AI Memory Compression Breakthrough

This article first appeared on GuruFocus.

Shares of memory chip makers fell Wednesday after Google unveiled a compression technology that could reduce memory requirements for artificial intelligence systems.

SanDisk (NASDAQ:SNDK) dropped nearly 6%, Micron Technology (NASDAQ:MU) fell 3%, Western Digital (NASDAQ:WDC) declined about 5% and Seagate Technology (NASDAQ:STX) slid 4%. The broader Nasdaq 100 index rose.

Google’s TurboQuant algorithm compresses key-value cache, a component used in large language models, to three bits without retraining models. The company said tests showed a sixfold reduction in memory size and up to eight times faster performance on some hardware.

Analysts offered mixed views on the potential impact. Wells Fargo said the technology could reduce memory demand if widely adopted but noted uncertainty remains. Lynx Equity Strategies said advanced compression is unlikely to significantly hurt memory demand over the next several years, citing supply constraints.