Google’s AI Innovation Causes Micron Stock to Decline, But Analysts Remain Positive

TLDR

• Micron (MU) shares declined approximately 20% over five trading days following Google’s introduction of its TurboQuant AI memory compression algorithm.
• TurboQuant has the potential to cut AI memory requirements by as much as sixfold, alarming investors in the memory sector.
• Memory industry peer SanDisk (SNDK) also fell 11% on the same announcement.
• Despite the selloff, Morgan Stanley analyst Joseph Moore reaffirmed a Buy rating, characterizing it as a “healthy pricing in of durability concerns.”
• Wall Street maintains a Strong Buy consensus with an average price target of $536.55, suggesting roughly 51% upside from current prices.

(SeaPRwire) –   Micron had just delivered one of its strongest quarters in recent times, with record revenue, record margins, and record earnings per share. Then Google entered the picture and complicated the narrative.

Micron Technology, Inc., MU

Alphabet introduced TurboQuant, a compression algorithm it claims can reduce the memory needed to run large language models by up to six times. The market did not hesitate to assess the details. Micron dropped about 20% across five sessions. SanDisk (SNDK) slid 11% on the news.

This was a severe reaction to a single announcement, prompting a valid question: does TurboQuant fundamentally undermine the investment case for Micron?

According to analysts who consulted industry contacts, the brief answer is no—at least not in any fundamental manner.

TurboQuant focuses on memory usage in one particular component of a large language model, not the entire system. Furthermore, with memory limitations easing in that specific area, AI developers might simply intensify efforts elsewhere, sustaining overall high demand.

Morgan Stanley Pushes Back on the Selloff

Morgan Stanley analyst Joseph Moore—a top-rated, five-star analyst—reiterated a Buy rating on Micron following the decline. He framed the market’s response as a “healthy pricing in of durability concerns,” rather than an indication of more profound harm to the company.

After discussions with industry insiders, Moore informed clients that TurboQuant represents an “evolutionary development, with basically no surprises for memory.” He anticipates supply conditions tightening, not loosening, noting that customers are already prepaying for large-volume memory contracts in expectation of continued scarcity.

Based on current earnings, Moore calculates that Micron and SanDisk can produce annual cash flow equivalent to 15%-25% of their present market capitalizations—a rate he expects will drive the stocks “materially higher” over the long term.

The wider Wall Street perspective aligns with Moore’s. Out of 28 analyst ratings monitored, 26 are Buys. Only two are Holds. The average price target is $536.55, implying approximately 51% upside from current levels.

Micron also faces a distinct supply issue that TurboQuant does not address: the company can only fulfill between half and two-thirds of current High Bandwidth Memory (HBM) demand. New production capacity is not anticipated until 2027. That shortfall is not disappearing soon.

Growth Numbers That Are Hard to Ignore

The revenue trend is unmistakable. Micron posted $13.6 billion in revenue two quarters ago, $23.9 billion last quarter, and forecasts $33.5 billion for the coming quarter.

This is not a company lacking for customers.

The total HBM market is projected to expand from $35 billion in 2025 to $100 billion by 2028. The next phase of AI growth is increasingly focused on inference—the process where models solve problems in real time—which demands persistent, ongoing memory usage. This is Micron’s specialty.

The stock’s 52-week range is $61.54 to $471.34. It currently trades at $355.62, significantly below its peak but more than five times its 52-week low.