Micron shares drop over 20% in six days after Google unveils TurboQuant

08:20

By: Dakir Madiha

Micron shares drop over 20% in six days after Google unveils TurboQuant

Micron Technology shares plunged more than 20% over six straight sessions, entering bear market territory. Investors fear Google's new AI memory compression algorithm could weaken demand for chips fueling the artificial intelligence surge.

The stock fell 7% Thursday to close at $355.46, down 23% from recent highs and posting the worst multi-day stretch since the April 2025 tariff-driven selloff. Shares dipped further in pre-market Friday, dragging down the memory sector including SK Hynix, Samsung, Western Digital, and SanDisk.

Google announced TurboQuant on Tuesday, a compression technique that shrinks key-value cache the working memory AI models use for context—from 16 bits per value to just 3 bits. This cuts memory needs by at least sixfold with no measurable accuracy loss, per Google's benchmarks. The firm plans to present it at the ICLR 2026 conference next month. TurboQuant scored perfectly on needle-in-haystack retrieval tasks and sped up Nvidia H100 GPUs up to eightfold at 4-bit precision.

The lab-stage breakthrough has not scaled commercially. Still, it rattled a sector booming on AI shortages, where SK Hynix and Samsung gained over 50% this year before the drop.

Micron reported blockbuster fiscal second-quarter results on March 18. Revenue nearly tripled year-over-year to $23.86 billion, with GAAP net income of $13.79 billion and gross margins of 74.4%. Management forecast $33.5 billion in third-quarter revenue, with margins expanding to about 81%.

Despite the numbers, Micron trades at a forward price-to-earnings ratio of just 4.5 the lowest in the S&P 500, per LSEG data cited by MarketWatch.

Analysts see a buying opportunity, not a structural threat. Morgan Stanley's Joseph Moore kept his buy rating, calling the pullback a "healthy reckoning of sustainability concerns" and TurboQuant an "evolutionary development with no real surprise for memory." Wells Fargo cited the Jevons paradox: efficiency gains lower costs, spurring broader adoption and higher demand. Quilter Cheviot's Ben Barringer told CNBC: "This is evolutionary, not revolutionary. It does not fundamentally alter long-term demand prospects for the sector." Wall Street's strong buy consensus targets an average price of $536.55, implying 51% upside from current levels.